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7 Ways To Manage Inventory With Specialized Delivery Services

Tue, 08/26/2014 - 11:10am
Will Bacon

An OEM’s procurement or buying department is essential to maximizing the manufacturer’s entire supply chain. Here's a look at the seven ways manufacturers can partner with suppliers to reduce their inventory and streamline their logistics and market planning for advanced delivery.

1. Prioritize the management of A-, B- and C-class items

Inventory classification is typically based on price for A-, B- & C-class items and manufacturers can benefit from delivery programs that shift focus from C-class items that represent a low value spend in terms of overall inventory purchases but often a high level of associated non-value processes. These programs create a shift in resources so the focus can be on more effective management of high value A & B-class items.  

2. Choose modern advanced delivery models over a transaction-based supply chain model

Improved process efficiencies have evolved from the traditional transaction-based supply chain to the optimized supply chain that incorporates within it part usage tracking. This type of model creates a win-win situation where inventory and operating costs can be reduced, cycle times shortened and ensuring part availability.

3. Optimize resources for component manufacturers through an advanced delivery program

Typically resources can be optimized by focusing on:  

    • Reducing time spent in purchasing and planning activities
    • Cutting the amount of operations
    • Lowering the number of times parts are handled
    • Improving part availability
    • Implementing visual signals to ensure the necessary size and number of parts are available when they are needed 

This kind of focus can help consolidate vendors and reduce the stress of expediting inventory in a rush. 

4. Consider the right approach to managing C-class items

Advanced delivery programs should be flexible, scaleable and adaptable.  Innovative methods are available to incorporate customized delivery programs, such as, forward stocking location, delegated inspection authority/dock-to-stock, SealScan™, Kanban/direct line feed, vendor managed inventory, (pull system bin stocking) and vendor consolidation/C-class management.

Look for a supplier that offers strategic sourcing services and leverages centralized purchasing resources to consolidate vendors and reduce purchase orders. These suppliers should be able to manage inventory using forecasts while also providing value-added handling and packaging services like single/bulk bag and tag, kitting, assembly, special marking and surface treatment. 

5. Deliver forecasts to your suppliers for the best possible outcome

A manufacturer should expect a supplier to meet and discuss their supply chain operations. All the areas where value can be contributed should be assessed and a delivery plan customized accordingly. The starting point for this would usually be the manufacturer’s forecast. Then it’s a matter of looking at the customer’s planning system to manage the flow of parts and establish the appropriate size of inventory. 

6. Consider special handling and packaging availability

Special handling & packaging incorporates a wide range of services including custom labeling, barcoding, cluster packaging, kitting and assembly, direct bag printing and mil spec packaging as well as surface treatment marking, assembly of multiple components and kit creation.  Additionally, a manufacturer’s branded packaging could be used to allow delivery directly to the end-user.

It can even extend to inbound product inspection, corrective and preventive action, production part approvals, quality inspections and technical support, process improvement recommendations, internal and external auditing, validation testing and custom certification packets. 

7. Analyze your Kanban system

The two-bin Kanban system is very simple.  As the first bin empties, a scanner captures the information and once the bin is emptied, the system tracks the use of those parts and that data from the field scan is uploaded to a logistics center.

The logistics center receives the information and automatically sends a replenishment pack to replace the used contents from the designated bin.  The parts within the second bin are accessed while awaiting replenishment from the first bin.  As usage increases, the replenishment cycle quickens and as usage decreases, the replenishment cycle lessens.  

Will Bacon is the Advanced Delivery Program Manager at Trelleborg Sealing Solutions

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