Our Short Lead Times Help Grow an OEM Manufacturer’s eCommerce Business
In today’s “one-click-away” world, customers expect—and demand—their orders be fulfilled without hassle and in shorter and shorter spans of time. Patience is becoming a thing of the past. And this isn’t just in the world of business-to-consumer (B2C) retail. The same demand is being placed on manufacturers in the business-to-business (B2B) space.
If your customers sell products or parts online and are up against extremely demanding lead times, Westlake Tool & Die can partner with you to develop an innovative solution that gets you exactly what you need when you need it.
The Challenge
One of our clients, a large OEM manufacturing company that serves the plumbing, oil and mining industries, needed to keep their growing eCommerce business ahead of customer demand.
As their trusted partner since 1977, we were tasked with finding a solution that ensured their eCommerce business wasn’t just competitive but positioned for growth. Overall, they wanted us to:
- Greatly reduce lead times for all the products we supplied.
- Protect them from the high costs associated with carrying extra inventory.
This challenge was made particularly complex because we weren’t simply manufacturing parts and delivering them. We were manufacturing complete product lines that were fully assembled, welded, painted and packaged—which meant any reduction in lead times would impact a complicated series of processes.
We also knew that sacrificing quality wasn’t an option. Their customers had can’t-fail product demands. Plus, those products needed to be ordered in a click and delivered in the shortest amount of time possible. In other words, if our client didn’t provide high-quality products quickly, they didn’t get repeat business. They were leaders in a competitive eCommerce segment that needed a supply chain solution and fast.
The Solution
This isn’t the only complicated challenge we’ve helped this client overcome, but it was the largest to date. Previously, we were called upon to help re-engineer some of their existing products—making them more cost-effective so the client could compete on a global level.
This current challenge, however, involved more moving parts. But we immediately knew where to begin: inventory management. We knew that finding the right balance of inventory they kept on-hand versus inventory we kept on-hand would dictate how much product we needed to manufacture and by when.
To find that precise balance of on-hand inventory we:
- Analyzed historical inventory data to determine what (low) product volumes made sense for the client to keep in their facility.
- Used those numbers to figure out what our inventory levels should be internally, which included determining what new demands we needed to make of our own suppliers.
- Built upon all of this knowledge to understand what our product production cycles needed to be from a timing standpoint so that we could streamline them to deliver a cost-efficient inventory solution.
Inventory cost-effectiveness has everything to do with keeping a minimum amount of safety stock on facility floors and in warehouses. This reduces the total carrying cost of inventory for both us and our client.
Cost-effective inventory management needs to pair with proactive and efficient production cycles that must take into account upcoming demand while manufacturing products and parts in the shortest timeframes possible. This requires strong, regimented internal processes like those Westlake Tool & Die has in place.
While devising a solution, we communicated with our client every step of the way because we knew that a solution that’s both innovative and custom needed complete client buy-in at every stage. Ultimately, we were able to:
- Decrease our lead times by one week: from four weeks to three weeks (and even now, we’re working to further reduce lead times by an additional week with the goal of getting them down to five days in 2018—or, a 75% total reduction).
- Reduce their overall inventory levels, which greatly decreased their product carrying costs, allowing them to invest in other parts of their business.
- Commit to mutually beneficial stocking levels and terms.
The end result was a client that was able to sell a greater quantity of products and provide a larger assortment of them, which, in turn, made their eCommerce business more visible. By working with Westlake Tool & Die, our client got their products faster, thereby meeting spikes in demand from their customers and elevating the level of service they provide.
To date, this customer is our biggest because they know they can rely on our fast, custom, personalized—and innovative—service.
Want to reduce your lead times? Get in touch today!
