Lead time reduction is something all manufacturers wish to achieve. By identifying work-in-process (WIP), value stream mapping helps to pinpoint which processes in a production sequence drive overall lead time. Finding ways to reduce work-in-process (WIP) helps to reduce lead time.
Outsourcing the procurement of some materials (direct or indirect) is appealing since most manufacturers lack the capabilities or capacity to successfully capture the full value of total spend optimization. Procurement outsourcing providers employ many resources that client companies often lack in sufficient quantities such as procurement expertise, category knowledge, technology, and processes. Yet, while outsourcing procurement has its advantages it also poses some risks…
Lead time has a significant impact on inventory level. Thus, reducing lead time should be top of mind for manufacturers looking to better control their parts inventory. Long lead times tie up cash in huge inventories. This is cash that could be better used elsewhere in the business such as generating more sales or improving competitiveness.
Cooperation is necessary for any supplier agreement to be successful. However, successful cooperation in supply chain management relies significantly on effective contracts. Supply chain management contracts require clear, guidelines understood and agreed upon by all relevant parties. To create better contracts and manage them well, it’s necessary to carefully consider a few key elements.
Here at Falcon, we are big proponents of outsourcing functions that are not a core competency. It is how we help our customers every day since our core competency involves dealing with the details involved with purchasing and coordinating inventory levels for parts that cost pennies on the dollar. Through no fault of their own, the ability to source and manage these nuisance items effectively, typically falls outside of a purchasing manager’s proficiencies.
Likewise, more and more businesses are beginning to take a similar approach with their IT infrastructure. […]