Are you looking for help consolidating suppliers and items? Wondering where to start to reduce your on-hand inventory, improve your in-stock position, and improve replenishment?
Product complexity and product/stock-keeping unit (SKU) proliferation reduce the efficiency and effectiveness of a company's overall supply chain. Product complexity and proliferation impact areas of the organization including: order processing, manufacturing planning and scheduling, purchasing, inventory management, quality, and master data.
Consolidating your vendors can help save you time and money in several ways:
Reduced warehousing, cost of capital and obsolescence tied directly to inventory reduction
Reduction in logistics costs due to reduction is small quantity orders
Raw material and packaging spend reduction due to consolidation, once again leading to reduced unit cost
Improved manufacturing efficiency by reducing changeovers, leading to reduced unit cost
Inventory reduction for both finished goods and raw materials (including packaging) leading to an improved cash flow position or better return on assets for the company
Increased forecast accuracy due to an elimination of small unforecastable products
Increased margins and business profitability due to the reduction in operations costs