Services: Eldis

The Kelly's Awards judges praised Eldis as "an innovative melding of supply chain technology developments and outsourced purchasing capability delivering significant cost savings". No wonder that Lancashire-based Alstom Preston was all Ears - literally - when it came to listening to how to save money.

"The award means a lot to a company that is trying to develop a product," says Dean Henry, Eldis's managing director. "It endorses our strategy and the product."

Eldis is an independent Birmingham electrical distributor employing 35 people in two main divisions: electrical distribution and intelligent stock management. Last May its real time inventory control system, Electronic Automated Replenishment System (Ears), was adopted on a five-year contract by energy and transport infrastructure specialist Alstom Preston, part of the Alstom group.

Ears, an electronic and Internet-based method of recognising inventory shortfalls and automatically generating orders for immediate replacements, has been developed with Aston University over four years with grants of more than L300,000. The weight of a component in each bin is known and total bin weights indicate which parts, and how many, are needed. PCs at Alstom and Eldis follow the procedure for reordering, allowing excellent visibility for supplier and client.

Savings on components are split between Eldis and Alstom, ensuring that each company recognises and shares the benefits of co-operation, explains Henry. Spend is about L60,000 a month on low-value parts - L10 or less - which include spares for electrical motors, hydraulic fittings and fasteners. Alstom now gets one consolidated invoice a month instead of more than 50 from individual suppliers. "Our aim is to be a one-stop-shop for all of Alstom's standard parts," Henry says.

Success has increased their partnership on a global basis, with Eldis now delivering components in kit form to be assembled at Alstom in Warsaw and Prague. Alstom has also had its Shanghai branch managers tour the Eldis business.

David Arminas