Spring has officially arrived, and with it comes the expectation of me heading outdoors to tackle this overgrown jungle I call a yard. Thanks Spring!
Continuing our 2018 educational series, it’s high time we put lead-times under the microscope. More specifically, why (oh why) do you endure lengthy lead times, and how can you beat the system by playing the inventory management game that little bit smarter.
Increasingly often, I speak to frustrated customers who are dismayed at the long lead times they are quoted for vital elements of their supply chain. They’re surprized that we’re able to fulfil an order in a fraction of the time quoted by another supplier.
But why the issue in the first place, and why the surprise?
We all know that inventory is expensive. It’s expensive to buy, to ship, and to store, and it often makes up the bulk of our overall project costs. That’s as true for your suppliers, as it is for you and your project teams. In recent years we’ve seen suppliers pull back from holding large volumes (and varieties) of stock.
It’s not difficult to see why. As manufacturing production methods have improved and become increasingly automated, so too has the speed of production. It’s expensive to store wire and cable – those huge spools are heavy and need the right conditions for storage. The rapid development of newer, better technologies means that many companies are simply not able to handle the pace of change, and the requirement to warehouse multi-manufacturer, multi-spec products. This has forced more suppliers to rely on the “speed” of manufacturing to satisfy their customers’ needs.
In practise, that doesn’t work. At least not as well as it should. Manufacturing processes are not yet at the level where this business model makes sense, but they’re getting closer.
This industry wide shift often leaves you, Mr or Mrs Project Manager/Cost Engineer/Inventory Controller (delete as appropriate) sweating on unrealistic lead times being met.
So, what can you do to reduce lead times? Here are my top tips for staying keeping your supply chain on track:
1. Plan your purchasing better by spec’ing more thoroughly – By spec’ing in an additional level of detail and including functionally alternative products, you instantly increase the available inventory and give your teams room to manoeuvre. With many functional equals available at similar or lower cost, you effectively keep costs under control and prevent bottlenecks in the supply chain. More on that here.
2. Work closely with your suppliers – By providing forecasts and project details to your trusted partners, you enable them to forecast inventory demands and predict issues before they ever become issues. In my experience, so many supply chain issues could be avoided by working with your supplier to anticipate future orders and allowing them the opportunity to prepare.
3. Choose a supplier with dedicated stock – When it comes to choosing a supply partner, ask them in general terms about their approach to stock and order fulfilment. Expect them to be a little reticent at first – but why not – you need to know that your suppliers can help-out in a pinch. Here at WAVE, we hold extensive wire, cable and connector stock from a wide range of suppliers. Our long-standing relationships with manufacturers both large and small means we can access a more diverse range of inventory.
So, there you have it – a challenge, with a very actionable and effective solution.
Of course, we here at WAVE are subject to the same market forces and stock control limitations as everyone else in the United States. But what sets us apart is our ability to offer you a choice. The ability to say “Hey, we can either have that ready in a week, or here’s an alternative that does exactly the same job, that’s ready to go today!”
Until next time, happy spec’ing.
If you have a burning question or hot topic that you’d like to see covered in our educational series, simply drop me a line at email@example.com.