Hello everyone! In my last blog I shared 5 ways a Contract Manufacturer can reduce inventory cost. In this blog I will share 5 ways a Component Manufacturer can reduce Lead Time.

Inventory cost is a fundamental issue and needs a solution asap! reducing inventory cost can add a lot into the profits of Companies.

  • Use of Electronic  Data Interchange (EDI). EDI is used to transfer electronic data between organizations electronically. It increases speed and also reduces error rate and cost of manual entry. The main point here is that EDI reduces time required for paperwork and manual entries. Every information is stored electronically in the database with faster flow of information.
  • Ask for the forecast from your buyers. Buyers forecast is very important and you can ask your regular buyers for their forecast on component need. This helps you become aware of market need and you can prepare for the procurement.
  • Improve your forecast of possible orders. If the buyers’ forecast is not available, your forecast for demand of component can be a great help to get prepared for the manufacturing.
  • Divide or split the work. In manufacturing, the parts of components which do not require completion of other parts can be manufactured simultaneously. That reduces the lead time.
  • Try using Just in time (JIT). Just in Time as its name suggests; it means that the inventory or components needed to manufacture any product, is ordered whenever required only. In JIT, the quantity of inventory is also ordered as per the requirement.