Tier 1 Supplier Eliminates $14,000 Through Stocking Program

Executive Summary

A tier-one, construction parts supplier tasked FlexPAC to create a solution that would help protect their reputation with their customer. The supplier was previously purchasing foam pouches but constantly had to place orders with separate companies almost every two weeks due to a 4-5 week lead time. By helping to provide a just-in-time (JIT) delivery system and stocking program, FlexPAC was able to eliminate $14,000 of unnecessary costs.

Challenges

Before working with FlexPAC, the supplier was purchasing foam pouches that would protect parts they sent to their customer. Due to the high number of constant orders and quantity, they were experiencing leads times of 4-5 weeks. With the increase in lead times and the pouches often not arriving in time, the supplier frequently had to reach out to other companies to provide similar pouches. From going between multiple companies and the long lead times, a high amount of purchase orders had to be in place, leading to placing orders almost every 2 weeks. This led to tension between the supplier and customer because deliveries often were late, an increase in costs due to the need for overnight shipping, and issues with either running out of product or overstocking product.

FlexPAC’s Process and Results

FlexPAC carefully analyzed the challenges and was able to provide a stocking program. This program was able to provide JIT delivery and eliminate the high lead times. With the successful stocking program in place, the supplier was able to stay with the same type of pouches on a consistent basis. Without the need for overnight delivery from other companies and the costs related to overstocking, FlexPAC was not only able to save the supplier $14,000 every year but also helped preserve the supplier’s brand image with their customer.