The supply chain a vital link in the manufacturing process

The supply chain a vital link in the manufacturing process

The efficiency of the supply chain is all-important in today’s modern manufacturing environment. Purchasing is increasing its influence within organisations and the on time supply of raw material in a cost effective manner is strategically important to ensure that an organisation remains competitive in a time constrained, increasingly cost conscious and saturated market place.

Purchasing has always deployed checks and balances against their current supplier lists, but now more than ever purchasing professionals are employing the latest purchasing science in terms of measurement to drive continuous improvement in this vital link.

Over the years the process has been relatively straightforward. Raw material comes into the business, is held in stock and gets allocated to production in a timely fashion. Product is manufactured against customer delivery requirements and lead times and then gets delivered. However the critical part of this processes namely stock holding and the delivery time/ lead-time has changed dramatically.

With changes in economic circumstances, the amount of stock that customers are holding poised ready to ship has significantly reduced. The control of operating costs, of which stock holding is one, is all-important. In past years the philosophy was that businesses would hold stock to satisfy requirements and ship as and when needed. However this has changed. Customers are holding less and less stock so the need to satisfy demanding delivery requests efficiently and timely is all-important.

This is where the supply chain function has to derive continuous improvement in its own supply routes. Tekdata apply the same set of metrics to its suppliers as their customers apply to them. Suppliers are rigidly measured against strict performance criteria. However the process is very collaborative and not autocratic. Tekdata forms deep partnerships with its suppliers to ensure that the spirit of continuous improvement in supply is a joint responsibility. Tekdata works hard to underline the benefits that suppliers can gain from the process and the benefits that Tekdata get. If this is done well it can be very motivational for all parties involved, basically less stick and more carrot.

“The supply chain is at the heart of the process here at Tekdata,” states Paul Edwards supply chain manager. “Our customers demand that we meet aggressive delivery targets so this sets the agenda for our purchasing discussions. What’s more our customers also demand that we are cost effective in supply and again this features high on the agenda. Our metrics are very demanding but achievable and the focus on them has seen Tekdata achieve high percentage on time delivery figures for our customers.”

Article first published : 8/8/2014