Supply Management

Align supply relationships and flow to deliver value to your customer

The heightened focus on supply chain management over the past decade has helped companies improve the quality and on-time delivery of supplied parts. Lean supply management builds on those successes by aligning supply relationships and flow to deliver value to your customers.

Collaboration with suppliers delivers real cost elimination across the supply chain, better service levels and greater technology innovations from collaboration during the product design stage.

Supply management involves key processes that promote flow from your suppliers, build strategic supplier relationships, improve receiving and warehousing, and reduce costs. It develops clear commodity and sourcing strategies to control purchasing costs. It streamlines your sourcing and contracting process to develop supplier partnerships.

Benefits of Lean Supply Management

Pain Indicators	Benefits of Lean Supply Management
Multiple offshore suppliers Difficulty with communications Long lead times Need to buffer lead times with high inventory levels Frequent out-of-stock status on off-shore SKUs High fluctuation in order volume from customers paired with long lead times from overseas makes it difficult to respond quickly to changes in demand	Reduced material costs Improved material availability Reduced sourcing costs Improved incoming quality Reduced working capital requirements Reduced lead times Improved, more focused supplier relationships and performance

Case Example: Supplier replenishment program delivers materials in sequence.

With a focus on supplier management, parts can be delivered to their point-of-use and replenished based on consumption. Pella Windows and supplier, Cardinal Glass, developed a supplier replenishment process to deliver material in sequence to the line. As a result, Pella cut inventory from 17 days to six hours, reduced scrap from 3 percent to 0.3 percent (saving $2 million per year), and reduced floor space from 25,000 square feet to 1,500 square feet.

You can get similar results in all areas of your value chain. Many of the reductions and improvements realized when lean is applied to the factory floor can be achieved in other parts of your value chain, as seen in the results of these and other TBM clients.