Like many companies today, are you experiencing difficulties when it comes to managing parts, materials and suppliers? Do you struggle to gain and communicate enterprise alignment on preferred status? If this is the case, then it’s likely you’ll be able to relate to some of the following challenges.
4 key challenges that businesses face with component and supplier management:
#1 Engineers often find that it is easier to create new parts than try to identify and use existing qualified parts. This means they are not effectively leveraging existing intellectual property.
#2 Acquisitions can add additional problems to component and supplier management, including the added complexity of proprietary naming schemes.
#3 Part, material and supplier descriptors don’t exist or are insufficient to communicate this information accurately across the enterprise.
#4 Market demand for increased product variation further accelerates proliferation, which further accelerates the problems with managing the system
But why should companies be concerned with these challenges? And, what steps can they take to resolve them? First let’s look at the negative consequences that these problems cause:
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An increase in product and supply chain complexity, which only grows more difficult to manage
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Sub-optimised material spend, which increases costs and reduces margin
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Excessive inventory costs and reduced inventory terms. Again, this impacts of your margin.
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The inability to delivery product variability with scale, resulting in higher product lifecycle costs and reduced margins.
Having a system in place to manage your components and supplier can help to address these issues, by driving engineering, sourcing, quality, manufacturing and services towards a standard and rationalised set of preferred parts, materials and suppliers.
With part, material and supplier classification, users are able to easily find and reuse existing components. And, with the ability to characterise the preferred status, you’ll increase standardisation, increase purchasing power and enjoy a more efficient and agile product architecture and supply base.
By implementing component and supplier management solutions, manufacturers can realise significant and measureable benefits in the following areas:
- Reduce product and supply chain complexity, resulting in reduced inventory costs and faster returns
- Spend optimisation with preferred suppliers, in the realisation of immediate cost savings through the identification of duplicate parts and reconciliation of related purchasing relationships
- Accelerate the realisation of synergies resulting from mergers and acquisitions.
- Avoid costly post-productions change orders
- Establish proliferation controls to ingrain these benefits within the organisation as a whole.
With component and supplier management, the sourcing and product development teams will be on the same page. This empowers engineers to choose the best parts and materials and enables sourcing to optimise spend and reduce supplier complexities.
Want to find out more? Download our free guide: The ROI of Product Lifecycle Management:
