One thing that nearly everyone can say about life since 2020 is that it has been unpredictable. The pandemic altered the way that people live and work, and it also profoundly impacted supply chains all over the world. As a result, sadly, many businesses closed their doors, while others struggled to meet customer demand. It was a rude awakening for consumers who never thought about where everything from clothing items and food to everyday essentials like toilet paper originated. Moreover, it highlighted just how vulnerable supply chains could be to disruptions.
But what exactly is a supply chain? And what are some of the most common issues that can disrupt it?
A supply chain is a network of suppliers and manufacturers working to produce and deliver consumer goods or services. The chain includes everything from raw materials to the finished product, and each link in the chain depends on the other to function correctly.
The pandemic was a perfect example of how even a minor disruption can cause significant problems throughout the supply chain. When factories and other businesses shut down or slowed down, it created a domino effect that impacted every link in the chain. The domino effect resulted in shortages of essential goods and higher consumer prices.
One way to help forecast, prevent or mitigate supply chain disruptions is through vendor-managed inventory or VMI.
VMI is a system where a supplier manages the inventory levels of the products they provide to the customer. VMI's components include forecasting future demand and ensuring enough stock on hand to meet customer needs. The supplier is also responsible for reordering stock when necessary and informing our customer when we notice unusual usage patterns that could affect production schedules.
VMI applies to many different companies and suppliers but is common in industries where products have a long shelf life or are of high value. These industries could include paper products, food and beverage, pharmaceuticals, and automotive parts.
Regardless of demand, VMI always keeps a certain amount of inventory on hand. Knowing what stock is available reassures the customer that they will never run out of stock, and it helps to ensure that the supplier can meet their needs, giving our customers peace of mind they will have a continuous flow of inventory.
There are many advantages to using VMI, both for the customer and the supplier.
Some of the advantages for the customer include:
Some of the advantages for the supplier include:
VMI can be a win-win for the customer and supplier, when utilized to its full potential.
One of the most significant advantages of VMI is the ability to detect unusual demand changes and take action accordingly. This flexibility is essential in an era when unprecedented changes come quickly.
Let’s say a customer typically orders 500 components per month. However, due to the pandemic, they suddenly increase their order to 1,000 components per month. The supplier, using VMI, would be able to detect this change and take action to ensure customers' needs are met. Ways to do so could include appropriate inventory levels and the ability to increase production rapidly or explore alternate channels to reduce lead times.
This quick reaction is essential in today's climate, where we see unprecedented fluctuations in today’s economic climate.
As we've seen, supply chain disruptions can have a significant impact on businesses and consumers alike. VMI can help to mitigate these disruptions by giving the supplier more visibility into customer demand and trends. In turn, it helps the supplier make better production, inventory, and logistical decisions.
The supply chain is the foundation of every business, so it is crucial to keep it running smoothly and efficiently.
VMI is just one tool companies can use to help mitigate supply chain disruptions. Other tools include supply chain mapping, supplier diversity, and just-in-time delivery. By utilizing these tools, businesses can build a more resilient supply chain better equipped to handle unexpected disruptions.
Blue Chip’s Solve, Source, and Schedule Approach
The Solve, Source, Schedule Management Systems is a service help our customer reduce the total cost of procuring fasteners and other assembly components. Blue Chip assumes full or partial responsibility of managing the procurement, and inventory of the fasteners and other related hardware items.
Solve
We are committed to providing solutions and value added services to our customers. Developing a partnership between Blue Chip and your Purchasing, Engineering, and Quality teams allow us to explore all options for your application, and helps to reduce your time to market and minimize costs. Our advanced planning and thorough analysis of assembly methods, logistics, and inventory systems ensure a quality product, improving efficiency, and offering the most cost effective solutions.
Source
Whether your product calls for a special cold headed fastener or a complex assembly, Blue Chip has the resources to provide a diverse variety of products. Achieving our ISO 9001: 2015 accreditation has helped propel us to new level that produces the best results in quality, response and value. Blue Chip can aid in sourcing difficult and unusual parts, which can be time consuming. Sourcing a wider variety of products Blue Chip Engineered Products will all our customers to reduce its overall vendor base.
Schedule
Whether you have single or multiple locations you tell us where, when and how and we will make it happen. We diligently control the entire process from the time of your order, throughout manufacturing, to the flexible scheduling of releases. We understand the high costs associated in the procurement of your products. Our goal is to reduce your time spent on logistics and your investment in inventory, helping you enhance your company’s profitability.