Supply Chain Development and Management are always challenges at smaller manufacturing companies. Frequently we are working with departments of one, two, or three individuals. Both while at iPolymer and ENIDINE, I found myself deeply involved in Supply Chain Development.
The best approach is to create a Cross-Functional Team that brings to the table procurement, production, engineering, and sales. A Cross-Functional Team will bring product familiarity, component written and unwritten specification requirements, and alternatives that relate to design changes and customer acceptance.
For us, Supply Chain Development was a top corporate priority. Both iPolymer and ENIDINE leveraged top line growth by way of global sourcing. We had a full complement of CNC Machines, but those focused on short run production and prototype development. Larger runs of components were acquired from the best-in-class CNC machine shops or injection molding houses.
Total landed cost was one of the qualifying metrics. First and foremost was Quality with Delivery and Price running 2nd and 3rd in a ranked order.
Every company must optimize their inventory and material handling process to maximize their target business metrics. Too many companies try to optimize a department level without reviewing the interaction between department functions. Rarely does the management team honestly sit down and rank gross profit, revenue growth, lead time, product availability, inventory holding cost, and the cost of quality. Some of these metrics create tradeoffs within organizations, tradeoffs that affect how departments function and interact.
For both iPolymer and ENIDINE, a set of key metrics were short lead times for a broad range of products (SKUs) that represented lower annual volumes compared to, say, Automotive Industries. Our goal was to ship one of any 6,000 to 8,000 products within 2 to 6 weeks of receiving orders from our channel partners. Both companies kept their inventories at a component level state. Due to component commonality within our Bills of Materials, we were able to limit our stocked finished goods. We kept the components available for the yet-unknown future order from each product family.
