Lightening the logistics load

ESE MayJun15 Pg18 TTI 4Director of supply chain services for TTI, Drew Curtis, covers the three keys to solving logistics issues; ensuring the right parts, are in the right place, at the right time.

The biggest problem for manufacturers in the electronics industry isn’t getting parts, it’s getting the right part, to the right place, at the right time. The solution, according to TTI, is to establish a relationship with an authorised distributor to implement a full-service, custom tailored supply chain solution. Major distributors offer these services to make logistics as smooth as possible for customers, and as a means to predict purchasing, warehousing and shipping schedules for themselves.

The right parts

Everything starts with the component. In contrast to independent distributors, which might buy from off-shore and secondary markets, a fully authorised distributor deals only in direct-from-the-supplier components backed by an iron-clad chain of custody. This limits any opportunity for counterfeit or low-quality, re-manufactured components to enter the production stream. That’s especially important when dealing with US government contracts, where part failures or counterfeit situations in military and aerospace applications carry draconian penalties and long-term liability. Even for non-critical electronic equipment, quality components mean your product reputation won’t take a hit thanks to failure of low value parts.

The right place 

In a perfect world, manufacturers would have the component inventory they need standing by to build every product they can ship, ideally without having to pay for all those parts, or maintain the warehousing space to carry and track them. Manufacturers, however, understand how much that inventory and infrastructure would take away from their core business and bottom line. Distributors can help by maintaining production inventories and mitigating associated costs. They can implement programs ranging from virtual warehouses that earmark dedicated components for a customer, to managing and staffing an onsite warehouse at the manufacturer’s location.

It is best to begin custom programs early in the product cycle. During product design, a TTI supply chain specialist can help assess anticipated production schedules and make recommendations for securing component supplies throughout the entire production process; limited supplies for pilot programs and prototyping, escalating supply as production ramps up and then maintaining lead times and on hand supplies as full-scale production gets underway.

The right time

When production reaches its most efficient, custom programs can automate the vast majority of inventory management, ordering and stocking. Specific triggers generate purchase orders and integrate directly into the TTI warehousing system via the most effective method for the manufacturer, be that electronic files, web-based ordering, electronic data interchange (EDI) or other means.

This interactive communication ensures that component deliveries balance the requirements for production, stock on hand at the distribution warehouse, and the lead times required by the component suppliers. This gives the manufacturer the flexibility to choose the fulfilment process that works best for them—manual release of product to the production line, a scan from a kanban program, or even a fully automated program based on a predetermined schedule.

Once the right product has been shipped, TTI uses the forecasting information developed through this process to set ordering and inventory levels for maximum efficiency. TTI’s proprietary lot sizing analysis tool determines the most economical replenishment quantities based on the customer’s own processing costs.

There is considerable technology, inventory and insight that goes into a quality supply chain system, but the benefits of getting the right parts, to the right place at the right time can pay dividends for as long as a production run is live.