Supply chain inventory management training for
anyone ... anywhere ...anytime.
Point-of-use logistics, the relocation of
materials from the stockroom to their point of use in the production area,
is not a new concept. The auto industry has done it from its beginning and
most industries have had point-of-use success with low cost hardware.
Material handling and inventory storage are
two of manufacturing's high cost, non-value-added activities. The
elimination of the stock room, as it is known today, should be a strategic
objective of all manufacturers.
Point-of-use logistics that focuses on
getting the right materials to the right place at the right time and at
the right price must replace "beating-up" on suppliers for price
reduction alone.
Supply chain inventory management training for
anyone ... anywhere ...anytime.
Supply Chain
Management is the Key to
Point-of-use Logistics
Companies will never achieve their full
growth and profit potential, as long as business leaders continue to talk
about value-added supplier partnerships while continuing
to treat their suppliers as adversaries.
Most business leaders underestimate the
depth and breadth of business skills that are required to initiate and
nurture an effective supply chain management program.
Usually, these leaders hold suppliers at
arm's length and struggle to keep any economic gains to themselves. In
fact, organizations often try to weaken a supplier to ensure their own
control of profits.
This of course is ridiculous and is the
first obstacle to be overcome if point-of-use logistics is to be
successfully implemented ... for without a strong supply chain management
team, there can be no point-of-use logistics.
Management in pursuit
of point-of-use logistics must understand the value of and supply chain
management and be advocates of:
- Business and information
integrity
- Day-to-day supplier communication and
cooperation
- Free exchange of business and technical
information
- Responsive win-win decision-making
- Supplier profit sharing.
A "top
down" commitment and investment is a requisite to developing a team
of "make it happen" supply chain management professionals.
A Point-of-use
Logistics Success Story
Supply chain inventory management training for
anyone ... anywhere ...anytime.
A manufacturer of electronic component test
equipment was in need of additional factory floor space to build a
new multi-function tester. In lieu of leasing additional space, they
decided to convert their existing stockroom space into a tester production
area.
It was agreed that none of the new tester
parts would enter the down-sized stockroom and that all common parts would
be relocated to their using production areas as "point-of-use"
inventory. The key to making this project a success would be the creation
of a powerful supply chain management team and the development of a
supplier support network that would provided timely and innovative
point-of-use parts and logistical support.
High communications integrity, real-time
scheduling, visual materials control, flexibility, responsiveness,
superior quality, special materials transportation/ kiting
racks and a positive "continuous improvement" mind set were some
of the characteristics of the developed relationship.
Three years after the start of the project,
this product line represented over 50% of the company's revenue and over
80% of its profits. At the start of the project it took 23 days to build
the tested, today it is built in 3 days. The average profit margin for
prior testers was 32%, the multi-functional tester generated at profit
margin of 55%. Most of the credit goes to their supply chain management
team and the powerful supplier support network that it helped develop.
Value-added Supplier
Partnerships
Supply chain inventory management training for
anyone ... anywhere ...anytime..
In today's competitive business
environment, many manufacturing companies are turning to value-added
supplier partnerships to achieve the material availability performance
that is a requisite for successful point-of-use logistics.
When a company forms a supplier partnership
that performs one of the links in the supply-chain, both stand to benefit
from the other's success. The power of supplier partnerships is
undeniable. To a great extent, they have the best of both worlds: the
coordination and scale associated with large companies and the
flexibility, creativity and low overhead usually found in small companies.
Suppliers have knowledge and insight that
aren't burdened with guidelines from a distant headquarters. They don't
have long forms to fill out and weekly reports to render and can act
promptly, without having to consult a thick manual of standard operation
procedures. In an increasing number of industries, value-added suppliers
are proving to be fiercely competitive ... delivering high quality,
competitively priced materials to precise buyer schedule requirements.
An excellent way of establishing the
partnership relationship is to treat each other as an extension of one's
business. The value-added supplier should look to his partner for services
such as special procurement help on capital equipment and training needs
and maybe some process engineering or quality engineering assistance.
The buying partner, on the other hand,
should look to the supplier partner for product development input, cost
containment ideas and high quality parts/ components/assemblies
delivered to the right place at the right time and at the right price.
Customer supplier partnerships and Relationship Management training for anyone ... anywhere ...anytime. If you
would like further information, click here: Supply Chain
Management
