The unmanaged proliferation of parts, materials and suppliers across product lines and business units is a common and serious issue. Sourcing duplicate parts at different prices from the same or different supplier occurs more often than it should. Engineering specifies parts without fully understanding critical supply chain information such as lead time, cost and preferred suppliers. This lack of strategic supply chain alignment during the product planning and development process undermines your efforts to reduce complexity, cost and risk across the enterprise.
Growing complexity in your product and supply chain leads to sub-optimal supplier spend, high inventory levels, obsolete components and low sourcing and supplier management productivity.
You can reduce supply chain complexity and cost by rationalizing parts, materials and suppliers and by implementing a common, shared part library between engineering and sourcing. With this approach, you’ll be able to communicate preferred suppliers and critical part information to be used during the part selection process, optimize part volume and supplier spend, prevent proliferation of duplicate or similar parts, and increase inventory turns.
Process Improvement Opportunities
The most successful companies reduce supplier spend by transforming one or more of these key processes: