The Importance of Strategic Suppliers in Manufacturing Operations
As always, the push to increase profit margins is a top priority in most business models. Smart companies are always looking for ways to reduce costs in their manufacturing operations. One way that companies are changing the way they do business is by actively seeking strategic suppliers. Having a strategic partner base is advantageous because a true partner will understand the goals of the customer and use their unique talents to help satisfy the goals. By finding a partner that provides turnkey mechanical assembly services, companies can realize much more value than meets the eye.
Benefits of Partnering with a Turnkey Mechanical Assembly Services Provider
Here at PEKO, we’ve always believed that increasing the “value add” to the customer is a perfect way to help increase customer margins.
Providing CNC machined parts and sheet metal components is a value-add service unto itself; but by stepping up to mechanical assemblies, the customer can realize the following advantages:
1. Consolidating Supply Chain Management
Customers are increasingly recognizing the challenges faced by supply chain teams in managing suppliers and parts efficiently. Oftentimes, these dedicated individuals find themselves overwhelmed by lengthy Bills of Materials (BOMs) comprising hundreds or even thousands of items. When compounded with complex ERPs, planning processes, and scheduling tasks, it results in a significant bottleneck within the supply chain operations. One effective strategy to alleviate this strain is to establish partnerships with vendors capable of providing turnkey assemblies rather than individual components. This shift not only streamlines the process but also enhances efficiency within the supply chain team. By reducing the number of purchase orders placed and consolidating suppliers and components, supply chain teams can operate more efficiently and effectively manage their responsibilities.
2. Optimizing Floor Space for Core Competencies
Real estate costs can be a significant burden on businesses, especially in challenging economic times. Expenses such as the cost of real estate itself, building maintenance, and taxes can all eat into the bottom line. When original equipment manufacturers (OEMs) opt to build products from scratch or handle integration in-house, it consumes valuable real estate within their facilities. Utilizing precious real estate for low-value assembly tasks that could be easily outsourced to a supplier leads to inefficiencies. OEMs are increasingly recognizing the benefits of partnering with value-added assembly suppliers to streamline their operations. By leveraging turnkey assemblies, companies can free up floor space for their core competencies, boost productivity, and expedite the production process.
3. Managing Demand Fluctuations Effectively
Idle labor can be a significant drain on the bottom line, especially when forecasting falls short. Let’s face it, forecasting is not an exact science, and the manufacturing team often bears the brunt of the consequences. Poor forecasting can result in workers on the production floor having little to do, leading to considerable inefficiencies that are entirely avoidable. Opting for turnkey assembly suppliers allows OEMs to redirect their labor to established profit centers, only engaging the contract manufacturer when demand necessitates it. Striking the right balance between internal and external resources not only leads to improved profit margins but also drives substantial enhancements in manufacturing efficiencies.
Utilizing a supply base with suppliers who can provide turnkey assemblies is a smart idea for many OEMs. The ability to pull in these assemblies and integrate them seamlessly can significantly reduce the workload on the supply chain team. Moreover, this approach can lead to a reduction in real estate usage or allow for the reallocation of manufacturing floor space, thereby helping alleviate potential bottlenecks in production. Partnering with a strategic assembly provider also enables better management of fluctuations in manufacturing demand, ensuring smoother operations overall.
To learn more about how PEKO assists OEMs with turnkey mechanical assemblies, feel free to reach out to us today.
