Negotiating low volume lead supplier times is not without challenges. Vendors can look at low volume quantities or lower dollar value orders as less priority or of importance to fulfill. Adding to this challenge, Just In Time (JIT) delivery is often used to meet on demand client sales orders.
The pre-planned anticipated lead time in your ERP (Enterprise Resource Planning) system must be correct with no room for error. A caveat being early delivery. This is usually welcomed without penalty to supply chain.
Most challenges can be mitigated by following these 5 simple tricks to reduce low volume supplier lead times.
- Choose the right supplier. This means knowing where to go and always having a backup plan. In the example of an off the shelf item, know who the manufacturer all available distributors are. Direct contact with the manufacturer can help mitigate issues in getting product to the distributor and on to you. Contacting a manufacture will often give you (and your chosen distributor) more guaranteed lead times that eliminate worry. In select cases you may even be able to purchase directly from the manufacturer (even if this is something they don’t normally offer). Or, a manufacturer may offer to sell or ship smaller volume orders as a free or low charge sample quantity. Having a reliable EOL (End Of Life) distributor can be a good asset in these fast changing times. Technology keeps advancing and items are suddenly no longer available.
- Maintain strong supplier relationships. Communication, communication, communication. Quality vendor relationships include: clear, consistent communication with one another, expectation alignment, capabilities alignment, and mutual pre-planning of forecasted project plans. Being less reactive and more proactive in your relationship and planning can harbor a strong relationship and business partnership. This helps ensure that even is your order is small, it won’t be pushed aside. It will hold its importance and run on time.
- Pre-Plan capacity booking. This is an important consideration if you are ordering custom parts that require machining time or special materials. Put together a plan with your desired vendor to eliminate risk of sudden, unexpected long lead times. Discussing all specifications and desired traceability requirements can reduce order hiccups, errors and delays. For example, you may require an uncommonly carried material, or a Certificate Of Conformance (COC) to state batch and material lot numbers for traceability.
- Monitor on time delivery. Monitor orders from the day they are placed with the vendor all the way to the day they reach your desired delivery location. This is very important. Delivery dates can slip, shipments can get lost in transit, or stuck in customs delays. Orders require monitoring from the start to end. It is as important as placing the order correctly. Establishing expectations with your vendor may include: Formal order confirmation or signed contract in writing to be received by a certain date, Weekly or bi weekly progress updates from vendor, Shipment tracking info provided on date of shipping from the vendor.
- Understand total lead-time. This means understanding that total lead-time is not just suppliers’ lead-times, but also pre and post order processing, transit time, etc. Lead-time should be looked at in depth to understand the vendors’ lead time, packaging time required to ship, transit time, and order receiving time. Also consider and forecast time for possible logistics challenges like weather and border/customs clearance. This applies no matter how big or small the order you are placing is. A typical order confirmation will not take into account all of these factors. They must be understood and planned for accordingly.
It is crucial for orders to arrive as needed and when needed in order to keep manufacturing commitments. One missed ship date can put a whole assembly line on hold in manufacturing. Follow the 5 simple tricks above to reduce low volume supplier lead times and keep your manufacturing commitments.
Image: StarFish Medical
Lindsey is a rock star Senior Buyer with Starfish Medical. She has previous purchasing experience in the Automotive and Fashion Industry. She is passionate about reducing lead times without compromising quality or price throughout the commercialization process.