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
- Reduced invoicing and A/P costs
