3 Inventory Strategies to Make Your Supply Chain More Efficient

In today’s competitive marketplace supply chain managers and procurement teams are constantly striving to cut costs without sacrificing quality. Stay a step ahead of your competitors by implementing one or more of the following inventory strategies:

1. KanBan

Developed by Toyota in the 1950s KanBan controls the flow of product from the supplier to the production facility.  KanBan allows manufacturers to replenish their inventory as parts are used instead of carrying large inventories.  In addition, KanBan systems provide a means of forecasting demand so that shortages can be avoided.  A key component of the KanBan system is the KanBan card. Now primarily electronic, KanBan cards indicate to the supply chain that more parts are needed. KanBan cards usually take the form of email messages or other electronic signals to the supplier. Once the signal is received the supplier ships the parts needed to meet production demand.

A simple example of a KanBan program is a three bin system. In the three bin system the first bin is on the factory floor (the point of demand), the second bin is in the factory warehouse, and the third bin is in supplier’s warehouse. When the first bin on the factory floor is depleted, the inventory is transferred from the second bin in the factory warehouse. At this point the KanBan card (electronic signal) is sent to the supplier and the parts are sent from the third bin (supplier inventory) to replenish the inventory at the factory warehouse (the second bin).

2. Kitting

Kitting is the process of packaging parts together that are used in production assemblies. Instead of pulling parts from multiple bins for an assembly, a single bin containing kitted parts can be utilized. Manufactures can simply specify the required parts for the kit and the parts are packaged together. In addition to reducing assembly times, kitting reduces procurement and inspection times as well.

3. Consignment Inventory

Consignment inventory is stock that is still owned by the supplier and stored in their warehouse but allocated to a specific client. Consignment inventory allows manufacturers to pull in stock as needed without incurring the costs of the parts and storing inventory immediately. Another benefit of consignment inventory is the ability to avoid shortages by having dedicated stock available.

bisco makes inventory management easy

As a full service distributor of electronic components and fasteners bisco industries offers KanBan, kitting, and consignment inventory capabilities as well as many other supply chain services. Regardless of your requirements we will work with you to develop and implement the solution that is right for you. To learn more about bisco’s inventory management solutions visit biscoind.com or contact a sales rep now.