3 ways to secure your supply chain18th Jan 2022
Sourcing CNC machined parts in 2022
It is traditional (or at least, social media tells us that it is appropriate!) to approach January full of enthusiasm and positivity about the year ahead. That certainly isn’t easy, but perhaps, compared with this time last year, there is some reason to feel (very) cautiously optimistic.
Yes, the current economic backdrop is challenging. Energy and raw material prices are fluctuating, Covid is still causing uncertainty and getting the UK’s carbon emissions to net zero by 2050 will have greater and greater impact on how we live our lives and run businesses. However, identifying one area where you can take control will help to make things more manageable. Here I’ve set out three things that you can do to secure your supply chain in 2022.
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, it would appear that 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 is certainly worth investigating further.
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 demand has spiked in a way that you didn’t expect. Either way, it is tempting to send out an RFQ for 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? I have an alternative option.
To get the supply chain security you need, 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.
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.
This approach isn’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 totally eliminate lots of time-consuming, hands-on processes, and the associated stress.
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. Being able to confidently outsource all the processes associated with one component will save time, money and improve the security of your supply chain.
If you manage the whole process yourself, you might 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 have to 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 are 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 is our responsibility to build in an appropriate level of contingency time to manage the process and meet your deadline. Meanwhile, you are able to spend your time more productively and benefit from receiving a set of completed components with minimal ‘hands-on time’.
Partner with Penta
If you’re serious about securing your supply chain in 2022, get in touch with Penta 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.
Our ‘3Cs’ ensure that we can provide a level of service that customers are confident to rely on: we communicate well, we take care, and we are consistent.