Hi, and welcome back. In this episode of our supply inefficiency series, we want to talk about the costs associated with errors.

When things don’t go as planned, course-correcting can be an expensive and painful process.

Perhaps the most obvious errors involve the products themselves, whether through obsolescence, order mistakes, quality issues or stock-outs. But that’s not all you have to worry about.

Say you run out of inventory of even a single component. The subsequent downtime would eat up time and money until the replenishment arrives. Then, if you have to expedite production to stay on schedule, you risk making more mistakes and turning out lower-quality product due to an increased risk of human error. 

Thankfully, you can reduce these threats and save money by improving inventory management and making the production process more reliable and efficient.

Come back to Falcon Fastening soon to find out how establishing a vendor managed inventory solution may be able to help improve efficiency and save you money.

Thanks for watching!

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Reliable Stock™ Lean VMI Solutions by Falcon

Falcon’s Reliable Stock™ lean VMI program delivers 100% production uptime efficiency and reduces your lead times, while lowering your overall inventory investment in class C production components and fastening supplies. Talk to us today and find out how you could be saving time and money.

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5 Supply Inefficiencies Costing You a Fortune…Continued

Supply Inefficiency Intro
Supply Inefficiency IntroTotal Cost of Ownership
Lowering cost is a top priority, but many manufacturers just shop for the lowest price and completely miss the bigger cost-saving opportunity.
Supply Inefficiency No. 1
Supply Inefficiency No. 1Labor Related Costs
If you are purchasing and warehousing your inventory on-site, you should be aware of labor costs that are significantly contributing to your total cost of ownership, or TCO.
Supply Inefficiency No. 2
Supply Inefficiency No. 2Carry Costs
Inventory carrying cost can be up to about twenty-five percent of the overall value of the inventory, but this can be much higher without proper management.
Supply Inefficiency No. 3
Supply Inefficiency No. 3Buying Direct
It might seem better to purchase inventory directly from the manufacturer or supplier, but the cost of doing so includes more than just the purchase price.
Supply Inefficiency No. 4
Supply Inefficiency No. 4Freight Costs
If you are buying inventory direct, freight charges can quickly eat away at any cost savings benefit you initially believed you would realize, especially if you are using multiple suppliers.
Supply Inefficiency No. 5
Supply Inefficiency No. 5Error-Related Costs
When things don’t go as planned, course-correcting can be an expensive and painful process. Error-related costs, such as downtime, can make or break a production budget.
Supply Inefficiency & The VMI Solution
Supply Inefficiency & The VMI SolutionReduce Costs with VMI
Now, let’s look at how a vendor managed inventory, or VMI, solution addresses these five supply inefficiencies.