Supporting Variable Demand: Four Key Areas to Analyze

525123-Global SMT Jun_Burton Industries Variable Demand_Page_1As systems have created better real-time visibility in terms of end market demand trends, and raw material availability and production status in the supply chain, original equipment manufacturers (OEMs) have reduced finished goods inventory levels. The upside of reduced inventory is faster inventory turns and reduction of the non value-added costs associated with excess inventory. However, the downside is that a supply chain interruption or unanticipated spike in demand could result in empty shelves. One strategy to avoid that is simply to require the electronics manufacturing services (EMS) provider to carry a finished goods Kanban. However, pushing the costs of excess inventory safety stock down to the supplier doesn’t truly eliminate the cost. A better strategy involves working with the EMS provider to create a system that provides the needed flexibility, but minimizes the non value-added costs associated with material or finished goods in an extended “wait state.”

At Burton Industries, we have a number of customers with highly variable demand. The four areas our team focuses on optimizing to support variability efficiently are:

  • Design for procurement (DFP)
  • Forecasting
  • Stocking programs
  • Production throughput.

Read our latest article in Global SMT & Packaging which goes into more detail on this topic: Supporting Variable Demand: Four Key Areas to Analyze here.

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