October 11, 2018

What Keeps a Buyer Up at Night

By Todd Bauman

As a buyer, managing your company’s risks are a critical aspect of your job, and today’s globalization has made that task more difficult than ever. Challenges abound, including natural disasters, broken tools, poor or unacceptable part or product quality, and product obsolescence. Low-volume, on-demand manufacturing can help you meet those challenges and reduce some of these risks.

Natural Disasters, Unforeseen Issues, and Your Supply Chain

Think of the recent onslaught of natural disasters— tsunamis, hurricanes, and floods—we’ve encountered over the past few years around the world and the impact they may have had on your organization. Each impending natural disaster can result in downstream issues that affect your supply chain’s ability to receive supplies on time.

global supply chain
Your global supply chain can be affected by a wide range of unforeseen forces, such as natural disasters, increased government regulations, poor or unacceptable part or product quality, on-again off-again tariffs, and more. Photo Courtesy: Wall Street Journal

Add in some of the force majeure claims you have undoubtedly seen lately from some of your extended supply chain partners for things like increased regulations in China to clean up waste streams, or plant explosions around the globe, or other circumstances that have left you with retooling efforts that make your supply chain that much more difficult to manage. And most recently, list the on-again off-again tariffs that were originally only on your critical raw materials, may now include semi-finished and finished products as well.

Beyond natural disasters—and even if you have ensured your organization’s supply base is globally diversified so these supply issues are still manageable—there are other problems that can rear their ugly heads. What do you do when your injection molding tool breaks and it’s the only tool you have because you could not get the ROI you needed for the back-up tool? What do you do when this is the second ocean shipment in a row that was rejected by your incoming receiving department because of poor quality? Or, what do you do when your sales department is product pruning again and you need to figure out how to balance your inventory with adequate inventory for next year so you can avoid issues like product obsolescence or your finance team breathing down your neck saying “why so much inventory?”

On-Demand Manufacturing Can Help Mitigate Risks

Your job is hard and sleep is most likely lost at times, so you need as many tools in your tool kit as possible to help you be successful. Success for most buyers is measured by good purchase price variance (PPV), low inventory levels with high turns, and having the right inventory at the right time with quality products. So how are you supposed to manage all of these challenges? Consider working with an on-demand manufacturer willing to do low-volume work with the speed and quality to help mitigate all of these supply chain risks.

Protolabs is one of those on-demand manufacturers. To work with us, all you need is a CAD file from your engineering crew, which can be uploaded at our website, and you can get a quote in a few hours. This ability to rapidly produce high-quality parts in low volumes could be a game changer for you and your organization. We produce parts in both plastic and metal materials and use quick-turn manufacturing techniques across four primary technologies: 3D printing (additive manufacturing), CNC machining, sheet metal fabrication, and injection molding.

Opportunities to use this speed in low volumes include end-of-life products, new product introductions (NPIs), bridge tooling, and more. For example, wouldn’t it be nice to tell your finance group that you are ready to inactivate all items on the obsolete list under your buyer code because you found an on-demand manufacturer that could provide most future demands quickly? Or how about being able to reassure the NPI group—which finally got around to solidifying its designs—that you can quickly ramp up your supplies within days, in the proverbial hockey stick chart, in order to meet the newly launched product demands? Bridge tooling is a great way to help move a product through the design phase fast while also having the ability to cover the time it takes to get a high-volume tool made and validated. Or, still another example, you have the ability to make those 10 parts that the marketing team needs early next week for their trade show that they just told you about. All of these examples could make you an unsung supply chain hero.

Low-volume, High-mix to Support Customization

Today’s market demands are much more customized, which is moving manufacturing to become more reactive. This low-volume and high-mix ratio is not the supply chain of the past where mass production was the norm. Some manufacturers still focus their capabilities to mass produce products with high minimum order quantities (MOQs) and long lead times. Customization is changing how manufacturing needs to react and on-demand manufacturing has the digital horsepower and speed to help you meet your mass customization needs.

So there you have it. Buyers, you have plenty to keep you up at night—I can sympathize. But hopefully on-demand manufacturing will help you sleep just a little bit better.

Todd Bauman is Protolabs’ supply chain manager, materials & logistics, and is in charge of purchasing, planning, inventory, and distribution. He is a Certified Supply Chain Professional (CSCP), and holds an MBA from the University of St. Thomas. He has worked at Protolabs for more than four years, and currently is enrolled in a doctoral program at Capella University in Global Operations and Supply Chain Management.