Hello again, and thanks for tuning in to the last episode of our supply inefficiency video series.

In our previous videos, we talked about the various expenses associated with the total cost of ownership, or TCO. 

Now, let’s look at how a vendor managed inventory, or VMI, solution addresses these five supply inefficiencies.

Labor costs associated with procurement, receiving and stocking are the basic and most significant costs eliminated with a VMI program, freeing a manufacturer to focus on greater areas of cost savings.

Since a VMI provider warehouses your inventory at a nearby distribution center, carrying costs and freight charges are practically eliminated.

 A VMI partner will handle preliminary quality inspections and will keep a safety stock on hand and on order, making error-related costs like stock-outs and expedites a thing of the past.

Finally, working with a VMI partner like Falcon Fastening gains you access to a high-quality supply base offering better prices and faster lead times.

Contact us today to schedule an inventory cost reduction assessment and learn how much you could be saving with a VMI program from Falcon Fastening Solutions.

Thanks for watching!

Schedule a Consultation

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.

Schedule a Consultation

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.