How SCM Keeps Everything Running Smoothly
As a small but dynamic company, BCD’s success depends on every team functioning at top capacity. All of us have an important role to play in providing the best possible support to our clients, but it can be easy to lose track of how all of our responsibilities function together.
To better understand how we contribute to BCD’s overall success, we want to highlight each team by exploring what they do and how they do it. This week, we’re focusing on how BCD’s Supply Chain Management (SCM) keeps everything running smoothly.
Today’s modern supply chain depends on material requirements planning (MRP). This inventory system controls costs by organizing itself around four elements: client demand, inventory, sourcing strategy, and distributor allocation. According to Supply Chain Manager Ellen Peng, with this system we can not only meet our clients’ requirements on time, but increase inventory turnover by limiting existing material use, too.
This isn’t to say MRP doesn’t come with its challenges: if the client requests a shorter lead time or lower costs, maintaining our standards of efficiency get more tricky. Ellen says the most difficult part of supply chain management is meeting high-mix, low-volume demand. If you don’t have a high volume to justify demand, you won’t always get the best price. Her team works hard to find the suppliers who do offer the best prices, so no matter how large the order, BCD can build the product at a reasonable cost.
Ellen also has to consider inbound and outbound logistics, which affect our sourcing strategy. She sources nearby suppliers for inbound orders and hunts for the the best couriers for outbound logistics to ensure products are delivered on time.
With our new 2-bin system, the SCM team is better-equipped to tackle these challenges head on. This system distinguishes between projects based on their size: standard-sized and smaller “mini” orders. Depending on the size of the order, we have different protocols for handling them, and keeping around inventory so we can quickly fulfill client demand can tremendously shorten lead time. Not many companies use the 2-bin system due to the increased costs associated with it. But at BCD, fulfilling client demand as soon as possible is of the utmost importance, and for us, the quick turnaround time is worth it.
These protocols and values have been the backbone of our supply chain system, and since Ellen became manager, she’s seen new programs, like the 2-bin system, improve our overall efficiency. She reports that we’ve set up a strong supplier database to support new project development, and fortified our logistics team so it can better support our global clientele. We’ve also implemented the VMI program, which allows us to tackle shorter lead times as well as long ones.
This maximizing of efficiency in cost, time, and quality has helped us meet and exceed our own high standards. For example, we exceeded our Y2015 goals for on-time deliver (OTD) and warehouse accuracy (W/A), and this year have increased our target percentage for both. In addition, since setting up our 2-bin system, we’ve reduced our project lead-time to 60 days after clients have issued an order.
We owe these types of improvements not only to the hard work done by Ellen and her team, but to our core values. By always prioritizing our clients, we have become the lean, agile, and flexible machine known as THE IoT ODM.