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Start small, think big

TTI 1Supply chain optimization brings well-known benefits such as lower total cost of ownership, but can these savings be realized on a small scale? TTI’s Cynthia Bova believes so.

Transitioning to a supply chain program with a component distributor can lower total cost of ownership, reduce inventory requirements and realize component cost advantages through longer, larger volume contracts. Some purchasers are hesitant to utilize these programs, however, due to misunderstandings about how difficult they are to set up and manage, the volumes required, or the integration of inventory and ordering systems.

Cynthia Bova said: “At TTI, we offer many different value added supply chain solutions to help customers manage inventory, reduce costs, mitigate risk and save time and effort. These services can be extensive with a high degree of integration between TTI and the customer’s supply chain processes. Advanced inventory management services include, for example: material requirements planning, forecast management, vendor managed inventory, auto-replenishment and stockroom management.”

Scalable solutions
Not every company, however, is ready — or truly needs — these robust supply chain solutions. Maybe a smaller company has experienced rapid growth and its processes are still trying to catch up, or maybe an established company may simply not yet capture enough data for reliable forecasting solutions.

Bova added: “The great news is that you don’t have to have a complex supply chain solution to take advantage of TTI’s expertise and value added services. Even for smaller accounts, TTI can provide actionable insight and supply chain data that will help customers create efficiencies and reduce costs.”

Given that pricing in the industry is currently very tight, there isn’t much any distributor can do from a component-pricing standpoint, but that doesn’t mean a customer can’t lower its total cost of ownership. Opportunities where costs can be reduced, such as purchase order consolidation, shipping lot sizing, optimizing inventory spacing and turns, or amalgamating payables, can be identified during the assessment phase of developing a supply chain program and can uncover significant savings.

Flexible tools
Fortunately, TTI offers customers the flexibility to test supply chain solutions by starting out small. They can implement forecasting and inventory management on just a few components on their bill of materials to test the effectiveness of the tools. This facilitates an ongoing evaluation of the program, refining individual areas where efficiencies, savings and improvements can be made.

In order to achieve these savings, a good supply chain program needs to have qualified personnel evaluating the system on a consistent basis. Fortunately, certification programs do exist and it is worth looking for them when evaluating supply chain partners.

Bova explained: “Our supply chain specialists are happy to work with customers to share what we’ve learned through decades of building effective supply chain solutions and in fact, many customers go on to extend that knowledge to other vendors.”

She concluded: “Regardless of size, ability to generate forecast data and purchasing process, customers can look to TTI to offer solutions right-sized and built just for them.”

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