How to Reduce Costs and Increase Efficiencies In Your Commodity Management Supply Chain

by Tim English - VP Superior Business Solutions on March 11, 2014

Looking for Commodity Management Solutions to Reduce Costs and Increase Efficiencies?

Guest Post by Jon Cummings, Superior Business Solutions Commodity Management Specialist

The Problem:

Upon visiting many Tier One automotive suppliers with multiple plant locations across the United States, I find that many are ordering labels, tags and print (forms) on a plant-by-plant basis. Unfortunately this leads to 6 major problems:

 

  1. Constant out-of-stock problems
  2. Lack of commonality in form design from one location to another
  3. The financial loss of the consolidated buying advantage
  4. Increased inventory levels to try and bulk purchase
  5. Numerous vendors to manage
  6. Obsolesces of inventory due to over purchases of item

The Superior Solution:

Superior Business Solutions collects data from each plant to discover what is being used at each location. By collecting this data we are able to:

  • Consolidate like items used throughout the individual plants
  • Make suggestions in an effort to consolidate similar items
  • Review each item to see if costs can be reduced on their print expenses
  • Purchase items in large volumes to reduce PPV
  • Warehouse items to improve delivery performance
  • Inventory items to reduce customers need on hand
  • Provide reporting so customers can look for any anomalies in purchasing history

3 Benefits Our Customers Are Experiencing:

  1. Reduction in piece price savings by taking advantage of economies of scale throughout all locations
    • Many experience double digit savings the first year
  2. Increased efficiency of purchasing department
    • Reduced PO administration time to place purchase orders
    • Reduced administration time to manage fewer vendors
  3. Reduction of on hand inventory levels and employee hours
    • Due to Superior stocking and shipping product as needed, inventory levels shrink by a considerable amount
    • Customers experience fewer employee hours to manage inventory, as Superior’s Corporate Kiosk manages this process for them

The estimated time savings system-wide is two to three hours per week per plant and an additional ten hours per week at the administrative level. That is a savings of thousands of hours per year, resulting in tens of thousands of dollars saved!

How to Overcome Your Challenges with Commodity Management?

One of the greatest challenges for any company involved with continuous improvement is knowing what to focus on when starting an improvement project.  By working with Superior Business Solutions and our proven Commodity Management Solutions team, we are able to assist our customers with up-front metrics along with providing solutions down the road to support them in meeting their goals of reduced costs and increased efficiencies.

Please feel free to reach out to me directly (JCummings[at]inkonit[dot]com) with any questions or contact Superior Business Solutions today and ask for an audit to reduce costs and increase efficiencies in your commodity management supply chain.

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