2 Exceptional Supplier Cost Reduction Techniques Beyond Manufacturing - Miller Fabrication Solutions

2 Exceptional Supplier Cost Reduction Techniques Beyond Manufacturing

August 5, 2016

Supplier cost reduction strategies for manufacturing industry clients are truly extensive. Lean manufacturing techniques play a vital role, as do cost control planning, audits and reviews. Your metal manufacturer may even help reduce your inventory carrying costs by holding extra stock for you.

But what about solutions beyond metal manufacturing? Surely your supplier has developed ways to reduce production costs in areas you hadn’t considered, but unfortunately, many suppliers limit themselves to cost reduction techniques strictly related to fabrication, welding and machining.

That doesn’t mean you can’t find a supplier with a more innovative mindset. When metal manufacturers break free of confined thinking, they may use the following two cost reduction techniques to help their clients save.

1. Adopt More Efficient Processes For Orders

When smaller metal manufacturers take orders, they often use outdated processes. Typically, an OEM sends a purchase order, which the smaller supplier then prints out. The order is entered into the system manually, with a great deal of room for error.

Employees may miss a key request in the order, enter in quantities that are too high or low, enter in an order for the wrong parts or make other mistakes. These suppliers must print and mail packing slips, burdening you with the labor of transposing the slips manually.

In contrast, larger firms have ordering processes down to a science. OEMs simply send an electronic order and make payment. If your orders are large, you would send batch files to the server, which are entered automatically into the system and notify your supplier’s team. Shipping notifications and payments are all automated electronically. You save on the costs of incorrect orders and delays to your production line.

2. Implement Cost-Saving Shipping Efficiencies

Suppliers that use cost reduction techniques beyond machining are especially focused on shipping. Manufacturing engineers typically design the shipping containers using a CAD (computer-aided design) program. Such programs determine how to stock and store parts, allowing engineers to use an animated model to see how parts fit in a container.

One employee dedicated to shipping efficiencies is simply not enough manpower. Larger suppliers should have as many as six or seven people. They should also reverse stack parts so you can unload components in the order they will be used.

Strategic shipping techniques enable your supplier to fit more parts and assemblies in a single shipment, reducing your transportation costs. You also benefit from increased throughput, fewer safety issues and less parts damage.

Your company likely has its own thoughtfully developed cost reduction techniques for production. Whether your methods are wide-ranging or focused on a few areas, you need a supplier that complements your efforts.

The right metal manufacturer has experience and expertise in cost reduction strategies for manufacturing industry companies. You should leverage your supplier’s knowledge to optimize your projects and stay within planned costs. In the right partnership, you’ll find it easier to meet big-picture cost targets.