Key words:#customized metal components #high mix low volume #logistic cost #partnership #strategic cooperation relationship
Traditional metal components sourcing mould is to have your demands met by different suppliers. As for mass production components, it is easy both for buyer to set up stock and for seller to prepare RM. While when it turns to customized metal components, the situations differs due to its unique characteristics, like high mix low volume, irregular procurement cycle and etc.
Sometimes, the Buyer has to explore the new supplier if the production line of its present supplier is busy occupied and without extra production capacity to meet its urgent demand. Firstly, in order to get quality metal components timely, the buyer has to redevelop, evaluate new supplier. FA validation, trial run, validation...all takes much time, let alone extra procurement cost. In the same time, if supplier promises to organize the emergency production for such kind of low volume customized metal components, generally speaking, small quantity means less margin taking changeover, manpower, RM consumption and etc. into consideration. And supplier might not charge these extra cost in terms of long term cooperation. However, if such kind of situation happens frequently, it will be a dilemma for supplier. To accept the rush purchase order or refuse it, both are the questions. To accept, it means that the supplier has to continue to bear the higher cost; to refuse, it will mean that their partnership might be influenced, especially when the production line is busy, whether to insert the rush order or when to insert it are the questions to the supplier. Unhealthy strategic cooperation relationship might be the long term result.
Secondly, if the newly developed supplier only has the capability of one customized metal product, while the buyer’s demands varies, should the buyer spend more time to deal with the assessment, evaluation, inspection and all related issues one by one with different suppliers? There is no doubt, the ideal pattern is to have less suppliers or one supplier, who could meet all of the buyer’s demand. On one hand, it is easier to manage the suppliers and lower procurement cost; on the other hand, it is easy to set up strategic cooperation relationship and secure the quality stability. But, such pattern might also has risk. If the unexpected delivery happens due to force majeure, the buyer’s demand would be surely affected; suppliers also are not willing to be the warehouse of stock.
Thirdly, logistic cost of low volume products is higher compared with mass production products. Cause, some charging items of international logistics are charged by sanctions, e.g, if the whole batch goods are divided into 2 to ship, THC fee will be charged twice.
In addition, to trace the progress of each shipment, the working load of logistics or import team of buyers’ increases.
Moreover, to finance department, it takes much time due to various suppliers and various payment terms.
Seems complex? And we are sure some Buyers are experiencing these problems, especially some small and medium sized companies since the manpower might not be enough to deal with the situations mentioned above.
Thus, it is really necessary to find a right supply chain management company to help solve the high mix low volume requirement for customized metal components. Pintuu, Customized Metal Components Solution Provider, is such kind of company. It has plenty of quality suppliers resources. And these suppliers have made for many famous brand companies and have rich experience to provide with quality products. Pintuu provides the service from right supplier selection to products delivery and all related to satisfy your demand.
Contact with us to learn more!