How OEM’s Are Capitalizing On Streamlined Supply Chain Management

Today it is more difficult than ever for businesses to manage constantly changing supply chains. Even in the best of times, inventory management can be piecemeal, with a single product requiring parts from a wide range of suppliers that may all have different pricing, shipping times, and terms for their contracts. This is especially true for small to midsize companies that don’t have the capital or resources to devote to supply chain management and streamlining. 

Many businesses are wondering how they can realize the cost savings of large capital businesses. How can they ensure they have access to the parts they need to build better products, while also realizing these cost savings, even though they may not have the volume or the capital to purchase multiple million dollars’ worth of equipment?

Most large companies are not only able to purchase their parts in bulk, but they are also able to partner with suppliers to make sure that there is a reliable supply chain and that parts are shipped in groups that help them realize the greatest cost-savings. Many suppliers are unwilling to work with small to midsize businesses, causing them to miss out on these efficiencies and enhanced supply chain management.

Here at Integrated Manufacturing Solutions, our goal is to bring our precision powder coating and sheet metal fabrication capabilities to our customers in a way that saves them time and money along every facet of the supply chain process. We work with our customers to understand their products and create individual kits that contain just the number of parts they need, similar to what large companies do.

These kits are delivered in recyclable cardboard boxes or returnable plastic totes which contain all the pieces needed to assemble a single job. When the customer is ready, they simply pull a single tote down from their warehouse instead of having to pay a material handler to run around to multiple locations and pull multiple quantities of multiple parts. This saves both time and money, and the more complex the product or the assembly process is, the greater the cost savings for the company.

Another benefit is our dedication to our craft. We employ the latest technology to create and deliver OEM parts that exceed the expectations of our clients. Many of them have realized efficiency gains from our technology that has allowed them to significantly increase their product margins due to low costs combined with improvements in labor, shipping, and storage.

Supply Chain Management Real-World Examples 

A recent client we worked with was able to benefit from some major gains after we simplified their OEM process. For this project, the customer required a kit that contained 12 different, individual part numbers. Each shift would build about 6 units at a time. Prior to working with them, a shift would be required to pull down 12 different pallets and then manually count out groups of parts from each pallet and then transport them to the assembly area.

After working with them to develop a tailored solution, we were able to simplify the number of parts they ordered so that they only bought exactly the pieces they needed. We were able to fit 6 sets of parts in each tote, meaning that now all a shift has to do is pull down a single tote with all of the parts in it that they need. This cut down on their storage needs and streamlined the assembly process as a whole.

Another benefit of this custom kitting solution is that we then created a single part code, or kit number, that contained 6 units worth of pieces. By having a single number instead of 12 individual part numbers, they were able to compound their procedural efficiencies when considering things like year-end inventory, cycle counting, purchasing parts, and more.

In the end, this client was able to do more than just reduce the cost of parts or employ better technology, they were able to streamline their process realizing gains all along the way.

If you’re interested in learning what IMS can do for your businesses, please reach out to us and see how we can streamline your entire supply chain.