How Can OEMs Cut Costs and Optimize Their Supply Chain?

For original equipment manufacturers (OEMs), the stress of product design and manufacturing often overshadows the maintenance of a lean supply chain.

Supply chain optimization is an initiative that always seems attractive, but it can be difficult to pinpoint just where to start.

According to a recent TMG-IMG study, OEM supply chain management and optimization can deliver enormous benefits to cutting costs associated with sales, administration, and products. Delaying a supply chain overhaul could lead to years of needless spending that could have easily be spent slashing costs.

Luckily, there are several simple steps you can take one at a time to achieve a lean supply chain, each of which carry a significant impact.

Step 1: Inventory Management

A well-maintained inventory can improve your business in a number of ways, some of which include:

Vendor-Managed Inventory (VMI) is a software-automated process offered by manufacturers like CGR Products to streamline the supply chain. In a VMI system, customers send automatically generated product reports directly to the manufacturer via customized software.

The advanced software eliminates the time-consuming rounds employees make as they walk around a warehouse counting products, as well as the possibility of human error or miscounting that result in delays and rush orders. Your entire ordering process is streamlined so only a minimum number of people have to touch each order.

Step 2: Production & Assembly Optimization

Design automation strategies, facility layouts, and production areas can all be re-organized and optimized to maximize workflow and efficiency.

One commercial small engine builder, for example, received die-cut rubber gasket parts in bulk delivery boxes, which called for a time-consuming assembly line process that involved stacking piles of parts, assembling them with additional gaskets, and finally installing them.

By changing to a rubber-coated, metal-clad material and packaging the parts in pre-counted and banded stacks, the OEM drastically reduced these assembly line times and achieved a direct costs savings of $400,000. Opportunities for small changes and efficiencies like these can be found everywhere, as long as teams are committed to looking for them.

Next Steps…

For more tips on cutting costs throughout the supply chain, we invite you to download our latest whitepaper, How OEMs Can Optimize Their Supply Chain.

The Many Benefits of Waterjet Cutting

Now that you better understand Kiss Cutting, it’s also important to understand when Waterjet Cutting benefit your manufacturing process. Perhaps the most important characteristic of  waterjet cutting is that it can be used on materials that are sensitive to high temperatures that are common of other methods. Essentially,Waterjet Cutting is the use of a high pressure stream of water to shape or cut a material. The process can be dated as far back as the 1930s when high pressure erosion devices  evolved into industrial cutting machines. Although they could only cut softer materials such as paper in the beginning, the technology developed methods of increasing water pressure which now give us the ability to cut materials as tough as stainless steel and at extremely high speeds.

At CGR, we find that Waterjet Cutting is the ideal choice for samples, prototypes, and quick-turn jobs because of its ability to offer excellent material yield. Utilizing a CAD operating system, our waterjet equipment has a rapid changeover time and allows for quick and easy dimensional changes to your parts. We are also capable of producing 76” wide cuts with an unlimited roll length. The CAD system that we use allows for maximum yield gains when compared with standard press die cutting. Add in the four head design of our waterjet fabricator and you’ll see why we are able to make multiple cuts with a faster production time. Using our waterjet fabricator services also lowers your initial set-up charge because the machine requires no tooling or tool maintenance, which means no cost is passed on to you and your business. Next time you need a prototype or a quick turnaround, consider Waterjet Cutting; it’s environmentally friendly and exceptionally effective.

3M to Increase R&D Spending

It is no mistake that 3M is one of the most successful American-born companies. Formerly known as the Minnesota Mining and Manufacturing Company, 3M now employs 88,000 people worldwide with about $30 billion in annual sales.  The manufacturing giant makes more than 55,000 products such as adhesives, laminates, medical supplies, car accessories & cleaning supplies, and optical films. 3M is responsible for game-changing products: waterproof sandpaper, masking tape, Post-It Notes ©, Scotch© Tape, and more. It’s one of the 30 companies included in the Dow Jones Industrial Average and number 97 on the Fortune 500 list.

We are proud to work with such a successful company with such humble American roots.  3M is a supplier of CGR Products and the partnership enables us to provide the best possible products and services. But it’s not just 3M’s past that makes it a great company: 3M is constantly innovating and researching new ways to come up with newer and better products. Each year, they spend billions on research and development to redesign existing products and invent brand new ones. In 2010, 3M reformulated Scotchgard to eliminate the use of perfluorochemicals and make it safer for the environment. Current CEO Inge Thulin plans to increase R&D spending to increase organic growth and focus on new and more profitable business ventures such as products for the renewable energy arena. New products from 3M could mean more for CGR Products and our customers, too!