Fasteners and Class C Component Supply

Falcon supplies fasteners and inventory management services to manufacturers in North and South Carolina, Kentucky, and the surrounding areas.

Charlotte Office

10715 John Price Road
Charlotte, NC 28273

Phone: 800.438.0332

Mobile: 704.588.4740

Mailing Address

P.O. Box 7429 | Charlotte, NC 28241-7429

Phone: 704.588.4740

Fax: 704.588.5753

Kentucky Office

11536 Commonwealth Drive
Louisville, KY 40299

Phone: 502.266.6292

Fax: 502.526.5567

5 Supply Inefficiencies Costing You a Fortune: Inefficiency No. 2 – Carrying Costs [Video]

Hi there, and welcome to inefficiency number two of our five-part series. In this episode, we will look at carrying costs. 

Now, obviously, you have to keep some inventory on-site, but storing more than necessary could cost more than you think.

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.

Let’s look at the four main carrying costs: capital, storage space, inventory services and risks.

Capital cost represents the cost of money and the lost investment opportunity. Storage space includes the lease, utilities, insurance and taxes. Inventory services may include taxes, physical labor and software, and depreciation, obsolescence and shrinkage are potential risks. Also consider the amount of inventory space that could be allocated to other areas of production.

 Carrying excess inventory can quickly drive all of these costs up, but finding ways to reduce how much you store on hand will help improve your budget.

Come back Falcon Fastening’s blog soon to watch the third supply inefficiency, buying direct.

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.

By | 2017-03-21T12:00:18+00:00 August 11th, 2015|Categories: Inventory Management, Lean Practices, Reducing Lead Times, Supply Chain, VMI|Comments Off on 5 Supply Inefficiencies Costing You a Fortune: Inefficiency No. 2 – Carrying Costs [Video]

About the Author:

Michelle is the Marketing Manager at Falcon Fastening Solutions, Inc. She is focused in communicating value to Falcon's customers, contacts and audiences by sharing the company's unique approach to fastening and class C production component supply.