External ordering of C-parts

In a previous article, we described how internal ordering from the production floor to the purchasing department can cause a waste of time, especially if it is done without accurate data recording in the ordering system. In this article, you'll learn what the time loss can be when ordering C-parts from an outside supplier. 

The purchasing department just received an order.

The Purchasing Department has just received Kanban C-part cards that need to be ordered for smooth production. Purchasing will begin entering the information from these cards into the ERP system, which will then generate an order for the supplier. Too many people are already involved in this stage of the process. Just delivering the cards to the purchasing department and passing information between departments about what to order puts a strain on the staff. It also involves entering them into systems, giving feedback to the relevant people and returning Kanban cards to production, all of which takes time for different staff.

An external order has to go through many processes once the need to order the required items is identified. Here are a few points that can be potential time wasters if the ordering process is not automated:

• Identifying the need to order items, which includes the time spent to write and ship the order.
• The process of ordering goods between departments, where time is spent informing each other.
• The process of ordering goods from a supplier (manual entry).
• Lack of planning insight, e.g. when is a good time to place the next order

Without up-to-date data, you're wasting your time.

Another critical time factor is when the goods arrive. You don't want the goods to arrive too soon because you will increase your inventory costs by stocking material that is not planned for in production. On the other hand, you don't want the goods to arrive too late either, because delays can be costly if production is halted. It's important to calculate the delivery time correctly, but if you do this without insight into the data, you won't be able to react to fluctuations in consumption, which increases the risk of having either too much or too little inventory.



Let's take an example:

You find out too late that there will be a shortage of tapping screws next week due to an exceptionally high order intake. Even if Purchasing orders the goods immediately after receiving Kanban cards from the factory, they must receive the goods sooner; otherwise, a problematic situation will arise. At the same time, it is necessary to calculate the new consumption in production so that it does not have to order again - but how to find out the new consumption if there is no overview?

If the reordering process is digitized, the logistics system automatically calculates the adjusted consumption and adjusts the delivery time based on reaching the new minimum consumption. Items from the supplier are only shipped when they are actually needed and in the right quantity, helping to eliminate stock-outs and other shortages.

Reduce manual checks and gain more time.

Another challenge is the lack of a comprehensive overview of the data, especially when orders for external goods are processed manually. This leads to unnecessary time wasted in checking and informing others of the delivery of the C-parts ordered. A solution may be to introduce logistics systems that visually display when an item arrives on the assembly line. For example, using a display that is continuously updated with the order status and delivery date. By ensuring that everyone on the shop floor, in the warehouse, as well as supply chain and purchasing managers have the same real-time information, the flow of information throughout the purchasing process is optimized.

Stay tuned to learn about how to prevent time loss in purchasing, manufacturing and C-parts warehousing, such as internal ordering, the replenishment process and how to automatically track inventory levels and missing items.