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How a better supply chain allows savings in die casting components
Supply chain is the management of the flow of goods and services from the point of origin to the point of consumption: a cluster of activities done in order to meet customer’s requirements, to coordinate the suppliers, clients and the company itself. In this post we are going to describe how a well-structured supply chain can lead to costs saving.
The supply chain department is a fundamental part of a company to save on die casting components. In this blog post, we are going to look at:
- The key points of an efficient supply chain
- The concept of supply chain
- How to cut logistic cost
- How to implement the solution
- The future of supply chain
Supply chain is the process of planning and controlling the efficacy of flows and storage of raw materials, products and information to reach consumers’ needs which includes activities such as customer service, forecasting demand, communication management, stockpile management, suppliers planning, material handling, packaging, transports and storage.
It is an extension of the main theme of logistic; while traditional logistic is regarding flows optimization inside the company, an efficient Supply Chain department recognizes that integration inside the company is not sufficient, but it is necessary to integrate a system with suppliers, clients and the company itself.
This approach leads to implement activities to reach the requested level in term of cost, working on saving, focusing on the customer needs to develop a supply chain as a network of involved organizations, that produce value in terms of products and services to consumers.
The key points of an efficient supply chains
The most important point in an excellent supply chain is to ensure that products and services meet customers’ expectations.
The key features of an efficient supply chains are:
- Delivery according to customer’s request date
- Speed of response to changes
- Costs management
- Inventory on hand
- Maximizing cost saving
- Working capital efficiency
To reach the above mentioned goals Bruschi has developed a tailor made supply chain.
The concept of supply chain
In Bruschi the focus is on the product and on the customer. Once the order of the client has been loaded into the management system, the delivery date has been defined, the program is settled and machines have been planned , in this moment the casting process is clear to all the members of the production.
When the order has been loaded into the system, the logistic specialist organizes the external manufacturing. Bruschi products are die casting components manufactured as raw parts, and stored directly in our warehouse, or sent to suppliers to be finished.
Bruschi does not only track the delivery to clients but also to suppliers to organize the entire process. When the finished product returns to Bruschi, the customer service and warehouse’s operators organize the delivery to the customer.
These activities allow to cut logistic cost, thanks to a good management of supply chain.
How to cut logistic cost
As it is described these processes seem easy to be realized, but these activities, with the related flows, have been developed to cut the customer’s cost. To plant processes like these is necessary to start with a bit of theory.
It’s possible to divide logistic costs into 5 groups:
- Storage costs
- Transports costs
- IT systems costs
- Costs of handling orders
Bruschi to operate in a cost reduction way has avoided overproduction and has implemented lean production philosophy in its plant. In this way the storage layout has been reorganized, in production and logistic terms: giving the goods the right space, dividing it into finished material - die casting components - and supplier material nearer to the exit of the storage facility. All these activities are organized in a cost saving approach.
To optimize the organization and have a simpler process, Bruschi has implemented smart flows to deliver products to suppliers. Bruschi manages transport network organized by a daily planning to optimize the savings without losing quality and time.
IT systems costs
Ensuring a better service for customers is the key point for Bruschi: to allow savings for clients software are integrated to the company one to organize better all the deliveries. In some cases Bruschi, to reach costumers needs, organizes storage facilities close to the client’s productive plant: a service allowed thanks to Bruschi’s IT that enables a more availability of the products for customers.
Costs of handling orders
In the last few years Bruschi has implemented a system of radiofrequency that aims to cut costs and simplify the process and, in some cases, Bruschi uses a Kanban system, a Japanese system that avoids overproduction and waste of materials.
Bruschi idea of reaction is a core skill in processes and in the relationship with the customer. Timing and the ability to meet a deadline are closely related to the schedules and the production plan in order to meet the customer's needs: this idea of reaction boosts these features over the ordinary. The key point of Bruschi is that all these processes are really quick because all the parts involved collaborate and are coordinate; in this way the reaction time is immediate.
How to implement this solution
Implementing this solution is not simple, but is helping because works directly on cost in process and flows.
However, to develop a system like that, supply chain professionals need to expand their understanding of business functions. In particular they need to have a better knowledge of purchases, of production planning, of marketing initiatives, of sales and promotional plans and of the Information Technology that is the key element, the bond that links components to supply chain partners in an integrated system.
In fact supply chain regards every aspect that is needed to reach the client’s request such as product development, marketing, distribution, finance and customer service.
The aims of supply chain in Bruschi are maximizing value creation, that value in supply chain is the difference among the final product and the costs to create it: this value is linked to profitability of supply chain.
The future of supply chain
However this process can only get better. For this reasons in Bruschi are planned innovations to be implemented in the next future to improve supply chain in order to reach and anticipate customer’s needs.
For this reason in Bruschi are implementing new tools and new software, thanks to the growing dynamism of advanced IT solutions, able to support of a multi channel sourcing of data, to secure speed to market and to reduce the risks of delays using alternative transport modes and routes and to be more flexible in adapting easily to unexpected changes and circumstances.
Bruschi engineers are able to monitor and optimize each die casting process phase, to ensure the quality and conformity of the final product and to support your designers' inventiveness to develop innovative and creative solutions together.
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