For each delivery shortages impacting the production, the family-run machine shop was losing on average more than $15,000 in delivery penalties and production loss time. The team of 8 buyers struggled to provide full visibility of the delivery statuses from their suppliers.
For the supply chain manager, this was an issue that she tried to resolve by putting in place:
- Shortage report meetings
- Daily operational stand-ups
- Frequent visits to suppliers
These measures did improve the situation but the shortages and delivery issues were still frequent. According to their costing analysis, the cost of delivery shortages summed up to $600,000 for the firm every year.
The main issue of the shortages was the fact that the team could not keep up with the amount of communication they were receiving each day from their 150+ suppliers. “When each one of my buyers manages 30 supplies, receive 60 to 70 emails each day, a lot of issues just fell through the cracks” Claire recalls.
It was clear that the company needed an all-in-one platform which would allow the procurement team to gain back control of their supply chain. With the help of our supply chain consultant, the team now has all their open orders status updated automatically and shortages highlighted well in advance.
"We started the implementation with our most important suppliers and in the first week we discovered tens of components in the risk of a future shortage and we were able to put in place measures to avoid them."
Within one week of implementation on SiRP platform, the firm was able to keep up with the growth with the current team, reduced the number of shortages by 55% and freed up resources to drive for cost reductions.