Is Your Metal Parts Inventory Management Draining Your Resources?
February 12, 2018
In the recent webinar, “Maximizing the Inventory Capabilities of Your Contract Metals Manufacturer,” nearly half of all attendees confirmed the use of inventory services provided by their welding supplier or fabricating partner. But how do you know that you’re receiving the full value of these services for your OEM business?
Shift The Risk Smartly
Proper manufacturing inventory management is not easy, nor cheap. Metal components are expensive to store. They require floor space that could be devoted to production and other operations. Just-in-Time processes and systems need to be managed by specialized personnel – APICS even has a certification for production and inventory management.
At the same time, improper management of your metal components inventory can have serious consequences. Inventory shortages caused almost 1,000 machines to go offline for one OEM. The company was then forced to develop new requirements and follow through with weeks of supplier audits as a result.
For all of these reasons and more, it’s crucial to understand the strengths of your supply chain partners. Often that’s as simple as identifying your welding suppliers versus your fabricating partners.
There’s a place in the supply chain for many different types of suppliers. Welding and machine shop suppliers, for example, can be ideal for simple, material-intensive jobs that do not require supply chain integration or scheduling capabilities.
On the other hand, strategic fabricating or contract metals manufacturing partners typically collaborate on complex, labor-intensive projects with OEMs. Fabricating partners often specialize in certain industries where high quality, agility and vertical integration are important.
These strategic manufacturing partners should offer a host of value-added services to complement their extensive manufacturing capabilities, such as finished goods inventory management. Just as there isn’t a one-size-fits-all OEM, there shouldn’t be one option related to each service.
The Options You Want With The Services You Need
The options available with a value-added inventory management service can vary from one fabricating partner to another. At a minimum, you should expect the following:
- “Quick Ship,” in which you can expect your metal parts in three days. This covers the picking, kitting and supplying of your inventory.
- A Kanban option that allows you to delay the shipment of one component while another part is pulled from stock and delivered.
- Vendor-managed Inventory (VMI)
- Consignment inventory
- A standard build-to-order option
It’s one thing to offer these types of options for value-added services like inventory management, and quite another to showcase how a metal manufacturer can competently offer these services while still delivering on high manufacturing standards.
The Service “Secret Sauce”
It’s no small feat to take on the inventory management of metal components for one OEM company, let alone many. Your metal manufacturing partner should be able to demonstrate how they’re able to effectively carry out these services without falling short in other areas. Whether that’s through a focus on lean manufacturing and continuous improvement initiatives or strong information control systems (or all of the above and more), you should feel confident in your fabricating partner’s methodology.
It’s also important to know how your metal manufacturing partner performs in each service area. For example, what is their inventory record accuracy (IRA)? What on-time delivery rate are their customers reporting, and how current are these results?
The Right Direction
It can pay significantly to maximize the service options of your strategic metals manufacturer. You can benefit with greater on-time deliveries, reduced operating and opportunity costs, and the freedom to improve your concentration on your core competencies. Quite simply, the utilization of value-added services can make it easier for you to do business and service your customers.
To learn more about metal parts inventory management and other services provided by Miller Welding & Machine Company (MWM), schedule a free consultation today.
Are you ready to learn more about how you can maximize the inventory capabilities of your contract metals manufacturer? Watch the recorded MWM webinar for more information.