Finding ways to increase supply chain efficiency is always good for business. As many companies are adapting to business challenges given the current pandemic, it’s even more critical to maximize the value of your supply chain to save time and resources, reduce costs, and shrink waste.
A material management program can boost productivity and provide measurable savings for a business. But, a critical factor in gaining real value from your material management program is remembering to not overcomplicate the process.
Developing a Material Management Program That’s Right for Your Business
Successful supply chain management means having the right amount of product in stock when and where it is needed. Material management programs help companies achieve just that. Yet, given the number of solutions and technology available to create a supply chain management program, overengineering the process is a possibility.
When developing a material management program, focus on short- and long-term business priorities. Don’t spend too much time getting bogged down in the “could be” terms.
“The ‘could-be’ terms are the various possibilities for a material management program that sound interesting or high tech, but may not create value for your business,” says Kris Lindsay, Supply Chain Solutions Program Manager, WESCO Distribution.
When a program is overcomplicated, you risk not generating the value that you hoped to achieve. For example, radio frequency identification (RFID) can be used to manage the removal and usage of consumable materials in a storeroom. RFID allows a user to pick up tagged items and walk out of the storeroom without physically scanning the items. The user can grab and go, saving time. However, every item, large and small, needs an RFID tag applied to them or to the container that they’re placed in.
An important question here is: does the labor saved by not scanning at removal outweigh the labor added by tagging individual items?
While tagging may not make sense for low-cost consumable items, the technology is effective in tracking high-cost items like transformers. In the event of a storm or emergency, using RFID technology would provide insight into where and when these higher-dollar items went during emergency response.
“Zero in on what technology gives you a total cost of ownership benefit,” says Lindsay. “Make sure the data you’re getting from your program is actionable and know how that information is being used to provide more value to your organization.”
To keep value-focused priorities at the forefront:
- Establish short- and long-term goals and use these goals as your guide when considering supply chain solutions.
- Focus on the factors that will drive quantifiable value for your business, such as improved efficiency and reduced costs. Then ensure that your program’s solutions well-position you to reap those benefits.
- Take company culture into consideration, and then adjust based on the actual needs of those using the solution.
- Get the right technology for the right circumstance by keeping end-users top of mind.
- Select a distributor partner who listens to your needs and doesn’t create a program that your team may struggle to keep up with over time.
“WESCO has a team of supply chain solution consultants, and their primary goal is to understand pain points. We consult with the customer on their needs, and we are careful not to over-engineer a solution,” says Lindsay.
Case Study: Material Management for a Solar Contractor
Recently, a residential solar contractor was looking for a distributor partner to provide a flexible system that enabled their drivers to order supplies on the go and replenished product to their warehouse when it became low. Working with WESCO’s supply chain consultants, a scalable solution was designed that created inventory control and applied job costing by:
- Utilizing cloud-based inventory management software in warehouse and trailers
- Applying a pick ticket system to manage a combination of WESCO supplied and customer-owned material
- Enabling a combination of vendor-managed inventory (VMI) and customer-managed inventory (CMI)
With improved material allocations and usage visibility, the program was implemented in twelve sites. By adapting the program to fit the company culture and refraining from over-engineering, the customer was set up for success.
“In this situation, goals were clearly defined and achieved with a suitable solution,” says Lindsay.
Getting Started With a Material Management Program
As you begin implementing supply chain solutions, focus on the areas that will deliver value, such as reducing cost and labor, improving productivity, and enhancing workplace safety. Some common supply chain solutions that can be evaluated to help manage material inventory include:
- Kitting: Minimize SKUs, streamline ordering processes, and increase productivity.
- Packaging and Waste Reduction: Keep the work site free of needless waste.
- Stage and Store: Products are packed for delivery as needed on-site.
- Storeroom Management: Reduce the cost of inventory control processes.
- VMI: Reduce layers in the supply chain, increase stock visibility, and decrease overall stock levels.
- Wire and Cable Management: Customize an inventory and material management process.
When it comes to inventory management, remember what your organization’s true needs are. Focus on short- and long-term goals, keep company in culture in mind, and ensure that data gathered is actionable, and you’ll be positioned for success.