Kink in the Supply Chain
Welcome to the June 2017 edition of my blog. This month, I am going to write about the importance of the supply chain and how the SYNCHRO ERP software can prevent any kinks.
Supply chain, what is it all about?
My personal definition of supply chain and the management thereof is keeping track of the manufacturing and distribution of castings and everything that goes into it. What has spurred this month’s topic is that recently I have personally encountered several instances where the supply chain has failed. When the supply chain fails, money, hence income and revenue, are lost and can never be recovered. It is like an empty seat on an airplane, once that airplane leaves the gate, any empty seat is lost revenue that is gone forever.
Example 1: When I go to a supermarket, I expect to be able to pick up and pay for certain staples. If the shelf is empty, then I go to some other purveyor of the good and make the purchase there. A one-off instance might be acceptable, but if it becomes the rule rather than the exception, then the supply chain has a kink in it and the supermarket is not maximizing profit.
Example 2: When purchasing something online and am then told it is backordered, there is a problem. I recently ordered something that is only available directly from the manufacturer. Not only was the part not available and on back order, they could not even tell me when it would be back in stock and they had no mechanism to inform me when it was available. This supply chain has a major kink in it. The vendor may not be losing money as they have a monopoly on the product, but customer satisfaction will take a hit and future sales will be impacted.
Example 3: I ordered another product online and the online system said X in stock, and I ordered it. Three days later I received an email that the product is not available and is on back order for four to six weeks. In this instance, the company lost the sale and the accompanying revenue as I found another vendor with a good supply chain management system and they could fulfill my order and ship on the same day.
In 2017, I expect a lot of things from the supply chain and so should you. A metalcaster never ever wants to run low on certain mission critical material inventory items such as molding sand, binders, and of course metal to melt. I do know of a large ductile iron foundry that had to shut down productions as the copper bin was empty; no copper, no ductile castings and gray iron is not a substitute.
Your customers will not be understanding if you are unable to meet shipping deadlines due to supply chain failures such as someone forgetting to order copper. A kink in your supply chain has a ripple effect as your customers supply chain will develop a kink.
With modern ERP-MRP software that embodies the basic precepts of supply chain management through scheduling and purchase order planning, your metalcasting operations should be smooth sailing, even when there are downstream supplier or delivery issues. The SYNCHRO ERP software solution provides the tools required for keeping the kinks out of the supply chain.
It is all about making money and maximizing profit.
Until next time, see you on down the road…
Shane Allen
Head of SYNCHRO ERP North American Operations
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