The biggest problem for manufacturers in the electronics industry isn’t getting parts, it’s getting the right part, to the right place, at the right time. However, even this three-headed issue has a solution that can be relatively simple: establish a relationship with an authorized distributor to implement a full-service, custom tailored supply chain solution. Most major distributors like TTI offer these services as a means to make logistics as smooth as possible for customers, and as a means to predict purchasing, warehousing and shipping schedules for their own business.
The Right Parts
Everything starts with the component. In stark contrast to independent distributors who may buy from off-shore and secondary markets, a fully authorized distributor deals only in first-quality, direct-from-the- supplier components that are backed by an iron-clad chain of custody. This situation limits any opportunity for counterfeit or low-quality, re-manufactured components to enter the production stream. That’s especially important when dealing with U.S. government contracts where part failures or counterfeit situations in military and aerospace applications carry draconian penalties and long-term liability for the manufacturers. But even for non-critical electronic equipment, quality components mean that your company and product reputation won’t take a hit if there are across the line failures of low value parts.
The Right Place
In a perfect world, manufacturers would have the component inventory they need standing by to build every product they can ship. And they could do that without having to pay for all of those parts, or maintaining the warehousing space and systems to carry and track those inexpensive components. Instead, manufacturers have accountants who understand how much that inventory and infrastructure would take away from their core business and bottom line. Major distributors like TTI maintain production inventories and mitigate the associated costs. They can implement programs ranging from virtual warehouses that earmark dedicated components for a customer, to managing and staffing an onsite warehouse at the manufacturers’ location, to customer-managed consignment programs.
It is best to begin these types of custom programs early in the product cycle – in the product design stage where a TTI supply chain specialist can help assess the anticipated production layouts and schedules and make recommendations for means of securing component supplies throughout the entire production process. Limiting supplies for pilot programs and prototyping, escalating supply as production ramp-up occurs and then maintaining lead times and on hand supplies as full-scale production gets underway.
The Right Time
When production reaches it’s most efficient levels, custom programs make the vast majority of inventory management, ordering and stocking a completely automated process. Specific triggers generate purchase orders and integrate directly into the TTI warehousing system via the most effective method for the manufacturer, be that electronic files, web-based ordering, EDI transmittal or other means.
This interactive communication ensures that component deliveries balance the requirements for production, stock on hand at the distribution warehouse, and the lead times required by the component suppliers own manufacturing schedules. This gives the manufacturer the flexibility to choose the fulfillment process that works best for them – manual release of product to the production line, a scan from a kanban program, a fully automated program based on a predetermined schedule or even other options.
Once the right product has been shipped, TTI systems use the forecasting information that has been developed through the process to base ordering and inventory levels for maximum efficiency. One such system is TTI’s proprietary Lot Sizing Analysis tool which determines the most economical replenishment quantities based on the customer’s own processing costs.
There is considerable technology, inventory and insight that goes into a quality supply chain system, but the upside of getting the right parts, to the right place at the right time can pay dividends for as long as your production run can live.
In addition to the warehouse space and infrastructure investment that a solid supply chain program can save a manufacturer, other overhead costs such as picking and sorting of components are covered as well.
The key role of distributors like TTI is the timely shipping of exactly the right components to ensure there is never a line down situation due to a shortage of components.
Bulk purchasing enables a distributor to carry large amounts of ready-to-ship inventory and provide greater purchasing power than any single manufacturer can typically receive.
Reprinted with permission from Electronics Sourcing North America.