5 Tips to Improve Supply Chain Management, from Falco Fastening Solutions.
Poor management can affect the entire supply chain of an original equipment manufacturer (OEM), but there are ways to make improvements. From procuring inventory to exporting finished products, any weaknesses in the chain can dampen efforts to move toward lean manufacturing. However, implementing the proper strategies can improve supply chain management to help the factory operations move more productively and eliminate issues such as production downtime.
1. Don’t put cost first
It is easy to assume that the direct acquisition cost (piece price) for a particular service or part may be best, but this is not necessarily the case. In fact, in many instances, that option could be the highest total acquisition cost. Inbound Logistics pointed out that some companies may charge more because they offer more reliable service. This can aid in reducing lead times, as you’ll be less likely to see delayed shipments of class C components or other shortcomings that can affect your operations. Spending a little bit for the sake of quality will help you avoid problems down the line that will negate the initial cost savings of choosing the most inexpensive service.
2. Streamline inventory
When you’re placing purchase orders (POs) with many different manufacturers, it can be easy for an order or two to fall through the cracks. A vendor managed inventory (VMI) program can eliminate this hassle entirely, as you’ll only be dealing with the supplier, who will be responsible for supporting your production plans. It also helps that suppliers already have established relationships with numerous manufacturers and can place larger orders at a time than an individual OEM. Buying in bulk can lead to per-unit price discounts that can help save you money in the long run.