Don’t think lean, keep stocks
Holding stock can minimise disruptions in the supply chain which are beyond the buyer’s control
Castings supplier Majorfax says manufacturers should go against lean thinking and keep stocks of surplus materials for clients to ensure that they can cope efficiently and accurately with increased demand.
Managing director Steve Cooper says that while stockholding is seen by many manufacturers as an expensive and unnecessary overhead, there is growing demand for companies to introduce a stocking structure to provide the most cost-effective solutions to their clients, particularly if the client is buying from low cost countries.
Despite the obvious cost benefits of lean supply chain philosophies such as kanban and just-in-time, holding stock can minimise disruptions in the supply chain which are beyond the buyer’s control.
Stockholding also ensures continuity of supply, improves efficiency and allows flexibility when faced with sudden surges in demand. If requirements cannot be met, the cost of remedial action could be much higher.
“Here at Majorfax we understand that correct stockholding is an integral part of a company’s materials management solution. We have actively invested in in purpose built, temperature controlled warehousing facilities to meet these exacting standards,” says Steve Cooper.
“It is important that manufacturing companies take an active interest in ensuring that the continued supply of products for their clients is cost-effectively maintained.”
This includes minimising risks in the supply chain by careful supplier selection, using knowledge and experience of managing global supply chains to anticipate potential disruptions and working together with clients to formulate the best combination of forecasting, stock levels, delivery and contingency to avoid damaging ‘stock-out’ situations.
Traditionally clients have been concerned about stockholding as they think their money will be tied up and could have been put to better use elsewhere. However, their suppliers could cover the cost of the initial financial outlay, which can help their customers with any initial budgeting and cash flow issues.
Surplus stock can then be held at the supplier’s warehouse until it is needed, meaning the client avoids expensive storage, insurance and security costs, allowing the manufacturer to benefit from line-side deliveries.
“By investing in warehousing facilities, we are now able to offer customers the best possible storage solutions for their bulk materials, in a safe controlled environment. At Majorfax, we’ve also taken on the role of managing the supply chain for our clients across the construction, domestic heating, power generation and bulk handling industries by incorporating their lead times into our materials management plan,” he adds.
“Knowledge and experience in stockholding also enables us to make recommendations on the best possible solution for our customers’ needs.”
Images for this article - click to enlarge
Unless otherwise stated, all images copyright © Mercator Media 2012. This does not exclude the owner's assertion of copyright over the material.
