As original equipment manufacturers (OEMs) across the country and the globe move toward lean manufacturing, you'll need to stay on top of the various ways you can steer your company in the right direction. One area of focus when you're trying to cut down on waste and improve productivity can be your inventory management system. While it is important to focus on reducing waste and shaving excess costs from the budget, you should take a look at your vendor list and see if you can find ways to reduce the number of companies with whom you procure the parts you need.
Benefits of consolidation
Consolidating your vendors can help save you time and money for several reasons. When you're ordering parts such as fasteners and class C components from a variety of sources, you can incur higher costs since you're ordering small lots and paying for the cost of shipping from each vendor. If you are able to consolidate orders, you'll see instant cost savings. Limiting the number of shipments coming in is also helpful for reducing lead times, as the odds of shipping delays will be greatly reduced. You'll also have to place fewer purchase orders (POs) when you're working with fewer vendors, which will save money and time when it comes to ordering. Plus, since the orders you place will be larger than before, you may see a cost improvement.
Try a vendor managed inventory (VMI) system
It's very likely that you won't be able to find one manufacturer that makes all the various components you need, but there is one convenient option that can circumvent this issue entirely and give you one contact point to order all of your class C components. A VMI program allows you to get all of the fasteners and other small parts you need in one place. The supplier will handle all of the procurement, and since the best ones have established relationships with sources, they can potentially improve the direct acquisition cost of the parts you need.
When you establish a partnership with the supplier, there are other advantages that will prove especially beneficial for improving inventory management. For instance, a VMI supplier can provide off-site inventory management, clearing up space in your factory and giving you less to worry about so you can focus on production. The supplier will provide you with the amount of inventory you need as you need it, so you don't have to worry about keeping track of surplus inventory and can enjoy a host of other benefits.