Is Your Supply Chain Flexible?
Colored pencils are the tools of the artist. In order to draw a picture, the artist must have a wide variety of colored pencils. The same is true for supply chain flexibility. Supply chain flexibility is the key to enhanced profitability, efficiency and operational effectiveness. A flexible supply chain must be able to “draw” or “shade” all of the elements of supply, production and delivery in a time efficient manner.
Supply chain flexibility is the understanding that one possesses about not only his suppliers, but also his customers. Said another way, you are looking backward and forward to ensure that your product is able to be produced in a timely, efficient manner.
The recent imposition of tariffs by various governments has given many companies pause as they consider and analyze the impacts of the tariffs on their products, especially if the product is manufactured outside the United States. Quality control, responsiveness and adaptability to changing market place conditions are paramount in today’s on-line, internet environment.
Our firm recently worked with a firm that did all of their product manufacturing in Asia. Initially, the “first article testing product” was superb. All specifications met, proper form, fit and function, it appeared to this firm that they had selected an ideal manufacturer for their product. Upon placing the first order for several hundred products, problems and challenges arose immediately. The off shore manufacturer only produced in batches. No flexibility was afforded to short lot sizes or necessary changes. Shipping time was over 40 days, by boat from Asia. Then, when the product finally arrived at the firm’s warehouse, a 100% article inspection was necessary to identify any errors or manufacturing deficiencies. Even a second trip to Asia failed to result in problem resolution. This particular firm elected to move the manufacturing component of the product back to the USA. Stricter quality control, much more efficient shipping schedules and small lot sizes allowed the firm to more easily adapt to changing marketplace conditions.
Information sharing both up and down the supply chain is imperative in today’s computer linked environment. Not only must you know and understand the challenges of your suppliers, you also have to know and understand your customers wants, needs and demands.
If you do not have a flexible supply chain, you are wasting money. This is money that should rightfully be placed on the bottom line. If you need help, call us! We can help ensure that your supply chain has maximum flexibility and your firm has increased profitability.