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Cash flow
Supplier
Plant
Warehouse
Dealer
Customer
Improve Communications
Safety/ Buffer inventory at each level Communicate electronically In house supplier personnel
Manage schedules Expedite Sales trends at retail level
3) Standardize
Benefits of standard products Lower prices Lower process costs Fewer quality costs Lower inventory costs
Standardize
Steps to standardize Use industry standards Classify parts Form a Standardization committee Get the supplier involved
5) Improve Supplier Quality Poor quality leads to more inventory Supplier selection Supplier quality audits Corrective actions
quantity
time
time
Average Inventory
Summary
1) Improve communications in the supply chain 2) Negotiate lower supplier lead times 3) Standardize to reduce inventory 4) Reduce surplus/ obsolete inventory 5) Improve supplier quality 6) Challenge supplier MOQs and price quantity breaks 7) Have parts delivered more often 8) Improve supplier on time delivery 9) Have supplier manage inventory 10) Give credit for inventory reduction.