Solving Supply Chain Hassles: Seven Ways to Avoid Stockouts

Establish a Tool Crib

Vendor Managed Inventory can include everything from nuts, bolts and other hardware items to the sheet steel or plastic pellets needed to build your products. For a machine shop or fabricator, though, perhaps the first place to implement VMI is in the tool crib. Here, vending machines and smart tool cabinets like those offered by ControlPoint can be used to control access to cutting tools and tooling, safety supplies, abrasive disks and wheels, and everything else that’s needed to keep machine tools running and employees productive.

Gone are the days when a worker takes the last drill bit or insert without notifying someone, thus shutting down an expensive piece of machinery over a low-cost supply item. With a well-run tool crib, hoarding is eliminated, as is theft, while tooling costs are precisely allocated to the job or project that consumed them. And because everything is in its place, factory floor workers don’t waste time looking for things. The result is greater uptime and more profitable manufacturing.

And even though it has nothing to do with supply chains, a robust tool crib strategy supports other productivity-boosting functions such as offline tool presetting and toolholder assembly balancing, not to mention RFID (radio-frequency identification) tagging of toolholders. With all of this comes the possibility of implementing tool management software (TMS), which is readily integrated with CAM and toolpath simulation systems, not to mention the shop’s ERP platform.

Just Say No

Your best customer just called and wants to work in a large order. Great news, right? Not necessarily. What if the raw materials, tooling and supplies needed to fulfill that order were purchased for a different job? Nobody wants to say no to a customer, but rush orders should be treated carefully.

Here’s where a well-managed MRP and scheduling system is worth its weight in gold. Sales and customer service representatives have complete visibility into potential shortages or resource conflicts before accepting the order, and if necessary, can charge the customer for overtime and expediting or even push back on the requested delivery date.

Get Lean

How do lean manufacturing principles eliminate stockouts? They don’t, at least not directly, but following them helps to reduce waste and make everything on the shop floor more efficient.

A lean manufacturing facility is one without surprises. Implementing better housekeeping practices such as 5S (sort, straighten, shine, standardize and sustain) reinforces other stockout-avoidance measures. There’s no overproduction, defects can be eliminated and schedules are more likely to be followed.

Get with the Team

Each of these strategies has one unavoidable side effect: change. And change, for most people, is difficult. That’s why the first step in any continuous improvement initiative—supply chain-related or otherwise—should be to get everyone involved. Tell employees why change is necessary. Eliminate fear. Ask for their advice. Make them part of the problem-solving team, rather than allowing them to be part of the problem.

The same can be said for your company’s suppliers. Develop strong relationships with each of them, but at the same time, make certain that they are well-organized and efficient. Your primary steel provider—or any other critical link in the supply chain—should be able to clearly delineate its contingency plans for an equipment breakdown, employee problems, shipping delay or similarly unpleasant event.

And while you’re busy asking those important questions, be prepared to answer them yourself when your customers ask for the same information.