Supply Chain Solutions Part I: Stocking
As noted on ourabout page, PCB Solutions has developed a unique stocking, packaging, labeling and bar coding system separated us from our competition. Very few of our competitors will allow customers to stock inventory. At our facility, we allow a customer to take advantage of longer term purchase orders and higher quantities. Today’s contract manufacturing and original equipment manufacturing (OEM) environment is as difficult as it has ever been. Companies of all types have got to be as creative as possible when it comes to all aspects of their supply chain. Finding a vendor that will allow stocking of product gives them an advantage on many fronts like improved pricing and better cash flow.
For instance, if a customer has an order for 9,000 units of a flex circuit board, and when cash flow is a concern (when is it not), the customer is able to place and order for 9000 units. However, when agreed upon, the customer does not have to take all 9000 units at one time. That customer can work with PCB Solutions on a stocking program to manage their inventory and keep it warehoused for them. PCB Solutions will order all 9000 units from the supplier but allow the end customer to take the product in scheduled deliveries over the course of 3 months. A three month stocking program allows for the product to be available to the customer if a quick pull in is required but also allows the customer the cash flow flexibility of taking the product over the course of three months. We would simply bill the customer each month for three thousand units once the product has shipped from our warehouse.
The good news: stocking programs are not limited to higher volume products.
Myachi Unitek is a customer based in southern California that manufactures and sales complex welding and laser cutting tools. They have been a customer ours for over 8 years. PCB Solutions has managed most of their PCB product line since the inception of the relationship. In fact, PCB Solutions, has helped their engineering team withengineering servicesin the past. We assisted them in updating engineering drawings and correlating them with the factory’s requirements for manufacturing.
Myachi Unitek had specific need for a supply chain specialist to manage their 30-40 part numbers for them. We stepped in with engineering services, cleaned up their documents and placed their inventory in our system. We now manage all aspects of their part numbers with a simple inventory program customized to their specific Material Reporting Program. PCB Solutions watches their inventory with our MRP and notifies them of re-order points based on usage statistics, factory lead times and shelf life restrictions. Shelf life restrictions is basically an internal policy that we do not allow inventory to be kept on our shelves for more than six months due to expiring surface finish concerns. We would leave it up to the customer to “bake” the product again after having it for more than six months without assembly to ensure there no chances of moisture in the boards which could cause delamination in the assembly process.
Their purchasing manager will receive a notice from our inventory specialist noting of a reorder. She then sends a blanket PO to PCB Solutions and we reorder the required product and replace the inventory as needed. While the program is not always perfect, we do indeed see the major benefits to our customers and especially to MU.
This program can work for any of our customers…even the high volume type customers. We have a few customers taking advantage of a program where high volume product is ordered and shipped via ocean freight. This product is shipped direct to our customer in their full quantity amounts…say two hundred thousand units in one order. We then place that product at the customer’s warehouse and ship the product only virtually via an invoice and pack slip. This is such a unique and cost savings program to the customer because of the significant shipping costs saved with domestic ground shipment costs are eliminated. Of course, the program is built on trust because we know the customer is not using all of the product and then billing us as scheduled inventory. Integrity is the key component in this situation and we trust our customers.