As part of any company's production process, reducing supply chain times to have less stock and provide THE PRODUCT on time to customers is essential to offering good service. Therefore, setting up a series of production processes that provide value until the final product is ready to be shipped to its destination is essential in a company like ours.
At Agui, we have noticed that anticipating the needs of our customers has a positive effect on the timeliness and delivery periods we offer. To this end, at our company we have been working for years on developing tools to improve logistics planning, track product traceability and shorten the supply chain.
Our experience in the manufacture of complex multi-technology assemblies has helped us to design a methodology that allows us to efficiently manage our suppliers, shorten delivery times and avoid cost overruns for the customers with whom we work in different sectors: lifting, energy and hospital furnishings, among others.
Thanks to this methodology, we can define how a product's traceability will be managed; that is, identify the process from the start of its manufacture to the end of the supply chain, when it reaches the hands of the consumer or becomes part of a new product.
Reduce costs by shortening the supply chain
Excelling in the control of a product's traceability and in managing the supply chain means being able to provide a very demanding service on time and using the least possible amount of economic and financial resources.
Poorly managed process traceability implies a lack of quality in management. In contrast, the optimal implementation and control of logistic traceability provides added security to the process, which translates into greater customer loyalty.
To this end, we need to work primarily on three levels: suppliers, internal manufacturing and customers.
It is necessary to adjust the pace (frequency and lot) of manufacturing, both internally and that of the suppliers, to the needs of our customers. The more aligned all the processes and the whole chain are with the customer's needs, the shorter the reaction times of the company and the lower its intermediate stocks, whether in the supplier's facilities, our receiving warehouse, production lines, issuing warehouse or in the customer's facilities.
In addition, the shorter that product supply chain is, the more reactive you become as a company and the better prepared you are to react to any instability in demand.
For this reason, at Agui we have implemented a system based on the following milestones:
- Weekly, the company's sales team issues ten-week forecasts for the entire portfolio of products.
- Weekly, the planning team reviews the manufacturing and production plans and sets up the product manufacturing and production processes four weeks in advance.
- The purchasing team informs the suppliers of the ten-week forecasts and plans the receipt of raw materials one week in advance of what the planning team will need.
Both the orders received and the forecasts are reviewed daily by the sales team to, if necessary, contact a customer or notify planning of a change in trends. In other words, our team must know exactly who receives the materials or products that we buy in the company, what material is received and when it is received. We must bear in mind that in a company, it is common to work with uncertainty in forecasts. Because of this, being able to create an operational and logistical tool that allows making decisions based on the real-time planning information we have from a customer, on past experiences or on what we think it will manufacture in the future, helps us to plan with the customer and confidently fine tune and adjust the forecasts.
Shorten the supply chain through communication. Signal planning model
How information is processed and how often it is communicated are keys for the system to work and to achieve proper product traceability. It is important, therefore, for the people who are part of this production process to be communicative and able to manage changes well.
In the same way, current technologies have led to a transformation in the way we control the traceability of a product. They also help us provide updated information and determine in real time the material requirements and other needs.
The implementation of the Kanban methodology, for example, together with the use of an RFID tag system, helps improve communication efficiency, as well as the aforementioned traceability of products.
We recommend, therefore, starting by implementing RFID tags with suppliers before trying to do so with customers. The RFID system, combined with smooth and agile forecast information, can be used to reach agreements with suppliers based on the receipt of materials by consignment, with the consequent decrease in inventories and increased reaction speed.
Managing forecasts with the customer
The same system that we at Agui have been using with suppliers and in the factory we are now starting to implement with our leading customers.
This requires the sales department to agree on or generate a specific supply plan for each customer that considers:
- Forecasts, including a channel for communicating with the customer to constantly review the forecasts against the orders that come in.
- Delivery deadlines and batches, including the management of peaks and valleys
Forecasts and orders must be constantly challenged to look for upward or downward trends, or unexpected peaks/valleys.
This information can be used to reduce batches and shorten delivery times.
The next step would be to define a Kanban system with the customer and optimize it by using RFID cards/antennas.
Lastly, to finish optimizing the system, the information generated by the RFID antennas would have to be processed through software that adequately displays the information and, in an ideal situation, would be able to use an application and connection to an ERP to generate purchase orders for suppliers and delivery notes for customers, thereby providing efficient control of the processes and traceability of the product
This complex and meticulous system has been developed by our specialists as accurately as possible to always give our customers the best and most outstanding service while reducing inventories throughout the supply chain.
For this reason, we at Agui are constantly striving to innovate and apply new logistic management tools in order to offer a cross-cutting value proposition oriented to sectors in which sustained security and reliability are key components. If you would like to know how we can help you optimize forecast management, logistic traceability management and reduce production costs, please contact us: