Case Study #4: DVD Distribution at AMS

The Inventory vs. Cash Flow Dilemma

The challenge for most manufacturer/distributors of consumer products to mass-market accounts is balancing service levels with inventory expense. To achieve order fill rates near 100% and order shipment in 24-48 hours, companies are forced to stand ready with an abundance of on hand finished goods inventory. The result of this approach is a sizeable drain of cash flow, which for most companies is not an acceptable approach to improve service levels.

Companies are concerned with controlling up front inventory costs, so they keep tight control of on hand inventory and struggle daily to manufacture product as new customer orders arrive. It seems no matter how hard they try, the end result is backorders and delays. Sometimes it takes 3, 4 or even more shipments to completely fill an order with a large number of line items… and it may take weeks before it leaves the door. The result is poor service performance that can negatively impact vital customer relationships.

Improve Service and Control Cost through AMS

For companies that distribute DVD product to mass-market and direct response clients, whether it be 5 items or a 5,000 title catalog, AMS Fulfillment Services has a unique warehouse management and distribution solution.

The solution is in keeping raw DVD components. In this environment, customers pay for just component parts up front and defer the labor cost component for assembly to a later time when the product is needed for customer orders or is built to maintain a minimum stock level. With this approach, wholesale DVD distributors are able to have more product available for customer orders while controlling or even lowering up front inventory costs. At AMS, we have the equipment, the experience and the controls in place to maximize the cost AND service benefit of keeping component DVD inventory. In fact, our DVD assembly team has been together for over six years building DVD product!

AMS account managers work very closely with the client, starting at the crack of dawn in review of daily order demands. By the time orders hit the floor at AMS, we know what exists as finished goods, what we have in raw components and what must be built to fill the day's orders. Raw discs, paper parts and cases are pulled together in accordance with a system-controlled bill of materials and sent to our production crew for assembly. AMS builds DVD product every day… some of which is needed to fill the day's orders and the rest is built to bring finished goods inventory to minimum stock levels.

The Finishing Touch

AMS shipping and logistics departments provide accuracy in order assembly, professional packaging and ship documentation, plus timely and cost effective transportation of product to customers. The end result for our DVD clients is a higher fill rate percentage; fast and accurate order fulfillment, lower inventory cost and overall operational satisfaction.

"Advantage Media Services has been our DVD Assembly facility since our company first began creating complex DVD box sets. Their ability to manage component inventory and assemble-to-order have made it possible for BCI to improve fill rates and reduce inventory simultaneously. Their expertise with DVD packaging is only surpassed by their competitive costs. We would be hard-pressed to find a better facility for DVD packaging and assembly than AMS."
- Greg Glass, Sr. Vice President, BCI Eclipse

Call Toll-Free 800 / 931-4267 to learn more about our fulfillment services!