Future-proofing your supply chain: 3 key strategies

11th Sep 2023
by Mark Walker

Future-proofing your supply chain: 3 key strategies

As a trusted supplier of CNC machined components, we understand the relentless pressures and challenges that our valued customers face.

 

While the economic landscape may have exhibited some stability since the beginning of the year, the road ahead remains uncertain. At Penta Precision, we've been dedicated to partnering with our customers to secure their supply chains and proactively mitigate any potential difficulties that may lie ahead.

3 ways to secure your supply chain

In today's complex business environment, we recognise the pressing concerns that keep our customers awake at night. Whether it's managing lead times, maintaining stock levels, or streamlining the entire supply chain process, we've been there with our customers every step of the way.

 

In this article, I’ll take you through three essential strategies that can empower your organisation to fortify its manufacturing supply chain and thrive amid any uncertainties. Let’s dive in…

 

1. Look for sensible lead times

Have you ever selected a supplier for your CNC machined parts on the premiss that they have the shortest lead time, only to be hit with last minute delays? This is something customers talk to me about frequently!

 

Unfortunately, there are some unscrupulous suppliers out there who will take on work knowing that they are highly unlikely to hit the delivery deadline.

 

Maybe they see a delivery date as ‘flexible’.

 

Maybe they made a mistake in their scheduling.

 

Or maybe they never even intended on hitting the due date.

 

Whatever the reason, a CNC machining company that can accept work instantly is probably worth avoiding.

 

Why aren’t they already booked up? There may be a good explanation for it – but it’s certainly worth investigating further.

 

What constitutes a ‘sensible’ lead time?

 

My recommendation is to work to at least a 4-6-week lead time. Of course, there are times when everyone needs a short turnaround. Maybe you’ve been let down by your usual supplier or took a chance on a new supplier that hasn’t paid off.

 

Or perhaps there have been inventory errors or misallocations in your MRP system, meaning you have less stock than you thought. Also, a spike in demand in a way that you didn’t expect can throw you off guard. Either way, it’s tempting to send out an RFQ with a lead time of two weeks (or less!). But realistically, you are setting yourself up for failure.

 

Yes, there are occasions when the stars align and your order comes through just when something else has been put on hold, but you need to be very lucky for this to happen!

 

The most likely outcome is that you’ll get a lot of ‘nos’, and the one ‘yes’ you get ends up delayed anyway.

 

And what if that delivery date then slips further and further? Better to assume a more realistic lead-time and know it will be met by a reputable CNC machining company.

 

2. Place Kanban or call-off orders

What if short lead times are common in your business, and a realistic lead time is always two weeks or less? The solution lies in your buying approach.

 

Stock components

I recommend one of two options:

Kanban system

To get the supply chain security you need, you can set up a Kanban system with your supplier. This means that you won’t ever be caught out as there is always an agreed level of stock held.

 

A consignment of components can be sent out immediately, and as soon as one batch is sent, a reserve kicks in while stock is replenished. This way you can always assume a 24–48-hour lead time.

 

Call-off order

A call-off order is another alternative if you have good forward visibility. Place a larger order of your machined components and schedule dates for deliveries at regular intervals throughout a set time period.

 

And if you can keep communicating regularly with your CNC machining service provider about your stock levels, you may well be able to postpone or bring forward specific dates too.

 

These approaches aren’t only for the realm of just-in-time manufacturing. I’ve found that the security and peace of mind that Kanban systems or call-off orders provide is a significant benefit to manufacturers operating any kind of production platform, and within any industry.

 

Whether you have unpredictable spikes in demand, or a more regular pattern, this is a simple way to ensure that you always have what you need. You may also benefit from a lower unit price by placing a larger order in advance.

 

3. Choose a one-stop shop

Choosing a one-stop shop for your CNC machined components could be perceived as a gamble, but with the right supplier, you can eliminate lots of time-consuming, hands-on processes, and the associated stress.

Finishing process on metal components

What will a one-stop shop do?

The one-stop shop will manage the whole process – ordering material, machining, any coatings or finishing processes, inspection, assembly and packaging for safe and prompt delivery.

 

They may even support you further, for example, by optimising a design for manufacture or helping to achieve a more environmentally responsible shipment.

 

What are the benefits of a one-stop shop?

Being able to confidently outsource all the processes associated with one component will save time, money and improve the security of your supply chain.

 

When you choose a one-stop shop, you’re mitigating the risks of managing the whole process yourself where you’re likely to find that small problems grow into much bigger issues that take up a lot of management time.

 

For example, a delay in material arriving means that you must rearrange machining, while waiting on machined components to be shipped means rearranging any finishing processes such as anodising or powder coating.

 

Each time something is delayed, you’re at risk of missing your slot with another supplier, compounding the problem and increasing your workload.

 

And of course, the more complex the component and greater the number of processes, the more opportunities there are for something to go wrong.

 

That’s why I always recommend partnering with a one-stop shop. Our customers find that the security it offers is a major stress reducer – it’s our responsibility to build in an appropriate level of contingency time to manage the process and meet your deadline.

 

Meanwhile, you can spend your time more productively and benefit from receiving a set of completed components with minimal ‘hands-on time’.

 

Ready to secure your manufacturing supply chain?

3 ways to secure your supply chain

I’m sure you’ll agree that in a rapidly changing world that securing your supply chain is a necessity and a challenge that demands proactive and resilient solutions.

 

As I’ve outlined these three effective strategies, remember that the key to success lies in preparation, collaboration, and adaptation.

 

By prioritising sensible lead times, opting for agile ordering systems such as Kanbans or call-off orders and opting for a one-stop shop CNC machining supplier, you can not only fortify your supply chain but also embrace the future with confidence.

 

Partner with Penta

Here at Penta, we will partner with you to ensure your business thrives, no matter what challenges the future may bring.

 

If you’re ready to get serious about securing your supply chain, get in touch with us to discover how we can help – be it with managing lead times, setting up Kanban systems or call off orders, or to discover more about choosing a one-stop shop for your CNC machined components.

 

Give the Penta team a call on 023 9266 8334 or email us at

 

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