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MAS Shortens Odds In The Supply Chain
01 Sep 2002
"Sometimes it is better to pay a higher price to get a lower cost" says Mark Eaton, Head of the Manufacturing Advisory Service (MAS) in the South East. He explains why sometimes paying a few pence more for a product can reduce overall costs to a business by thousands of pounds.
The price of a product is what it says on the label, whilst the cost of the purchase includes both the price and a range of often hidden costs such as rework, handling and inspection.
The savings achieved through buying in bulk can far outweigh the hidden costs associated with excess stock.
There is the risk of obsolescence, holding and staffing costs.
However, the most damaging hidden costs can occur when production stops because materials have not arrived.
A correctly managed supply chain can reduce overall business costs and lead-times, whilst also reducing space requirements.
However, many manufacturers fail to realise the benefits because they either lack the internal skills or feel powerless to improve because of the size of many of their suppliers.
Help is available from the DTI MAS for UK manufacturers wishing to improve their supply chain and benefit from a reduced cost base. To find out more, contact the MAS in the South East on 0845-609-2121. The team will put you in touch with your local MAS.
To find out more about the national MAS initiative visit www.dti.gov.uk/manufacturing.
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