Modern culture has shaped our mindsets towards instant gratification - and the world of manufacturing is no different. With the likes of on-demand manufacturing on the rise, the focus is shifting towards reduced lead times and efficient production. Therefore, it’s more important than ever to manage your supply chain effectively and identify any potential risks, as the consequences of supply chain failure can have a devastating knock-on effect for manufacturing businesses.
Supply chain management isn’t just about reducing costs. In fact, effective supply chain management considers cost versus viability of other factors. The cheapest supply chains are rarely the most efficient and can backfire, leading to incurred additional charges to remedy issues surrounding quality and turnaround times. Conversely, you do not want your supply chain to be so expensive that it erodes your profits, meaning that each must be tailored relatively to the individual design; a supply chain that works for one product line may not necessarily work for another.
Despite the fact that there are so many variables to take into account, there are a few universal rules that you can follow to ensure your supply chain works to the best of its abilities.
There’s nothing that puts a spanner in the works more than unexpected downtime. Not only does it throw your project off kilter, but downtime is quite literally wasted money. From the salaries of employees who are stood around with nothing to do through to lost production, downtime means nothing but bad news for manufacturing companies.
In order to avoid this, it’s important to ensure that you’re in receipt of raw materials before production is due to commence. Ensure that your materials supplier is reliable and well-briefed on your requirements. Nobody wants to be paying over the odds for urgent material delivery to complete a project on-time - that’s why it’s so important that stockists adhere to pre-agreed schedules.
Another cause of unexpected downtime is machinery breakdowns. Ensure that your plant and machinery is regularly serviced - after all, prevention is always better than a cure!
Gain a Mutual Understanding with Subcontract Suppliers:
When it comes to selecting subcontract suppliers, many manufacturers make the mistake of looking for the cheapest possible price. Unfortunately, this often leads to compromise on quality and reliability that causes more headaches than the monetary saving is worth.
Although cost will always be a consideration, it’s crucial that you look at the bigger picture and more specifically, any value-adds that could prove beneficial. For instance, the company you wrote off as being too expensive may be able to offer a reduced lead time, or KAN-BAN facilities. As a general rule, you can also expect to pay more for high quality, meaning that complex, high-precision parts will never be the cheapest to source.
It’s also worthwhile vetting your suppliers before placing a high-value purchase order. Start off by ordering a sample to double-check that your expectations will be met and if possible, arrange to visit your supplier at their premises so that you can gain a thorough understanding of their capabilities. In turn, inviting suppliers to your factory will offer them an unrivalled insight into your setup and the opportunity to adapt their services accordingly.
Assign Accountability Over Second and Third Tier Suppliers:
Your supply chain may require the involvement of second and third tier suppliers, meaning that you may inevitably forfeit control over some of the manufacturing process. If you permit your first-tier suppliers to involve third parties at their own discretion, then make it clear that you expect them to maintain overall responsibility. By placing accountability firmly with your first-tier suppliers, you can ensure that they will only use trusted parties to undertake any aspect of the manufacturing process that they themselves are not able to complete in-house.
Streamline Your Logistics:
When it comes to logistics and distribution, reliability should always be the number one priority. After all, late deliveries can be detrimental to your company’s reputation, even if the delay was caused through no fault of your own.
If you’re using a third party, it’s essential that you select a logistics provider who collects and delivers on time and also has a contingency plan in place should unexpected setbacks occur. If you have your own fleet of vans for distribution purposes, then ensure that they are maintained and serviced regularly to avoid breakdowns. There is also plenty of opportunities to cut costs if you handle distribution in-house - use vehicles that are economical to run and invest in route mapping systems for your drivers so that their journeys are as time and fuel-efficient as possible.
What are your thoughts on effective supply chain management? How have you streamlined and strengthened your supply chain? Leave us a comment below!