Raw material management reduces order lead time from 45 to 10 days

Case Studies

Challenge

The world’s largest producer of outdoor and athletic wear faced a dilemma when four of its Vietnam-based original equipment manufacturers (OEM) ran short on a key production material, resulting in significant production delays. Material lead times were around six weeks, so by the time an OEM ordered from the raw material supplier, it was often “too little too late.”

Solution

  • Volume price negotiations
  • Lead time reduction
  • Materials management
  • Inventory management
  • Ocean transportation
  • Reporting

Benefits

  • Order lead times for the OEM factories were reduced from 45 to 10 days.
  • The customer saw a notable increase in supply consistency as the OEMs no longer had difficulty reordering in time to meet demand fluctuations.
  • Enhanced transparency for the cost of raw materials.

Volume purchase negotiations resulted in more than $1 million in annualized savings.

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