SMT007 Magazine

SMT-July2015

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40 SMT Magazine • July 2015 price, we should look at what we can do to help our vendor manufacturer and fulfil for less, not how we can reduce their margins. An insolvent supplier is never a good one. Design Together, Design Better From the top, let's look at the design of the product and of the supply chain. I've mentioned both of these together because taking a concur- rent view on them is valuable. The sooner you start designing the supply chain, the more effec- tive and efficient it will become. And the sooner you involve your suppliers in the design process the more efficiently and economically they will be able to build your product. Your vendors are a great source of valuable data that will help you create an even better product, which can be manufactured and deliv- ered in a streamlined way. Chances are they've done something similar before and because these guys make and deliver stuff, they've be- come quite pretty good at it. We all know about design for manufacture, or DfM, but what about design for supply chain? This can be as simple as planning the packag- ing so the products stack better, or fit a pallet or container more efficiently. It could be design- ing around components that are readily avail- able and don't leave us open to risk of shortages through single sources. Collaboration at this de- sign and development phase is essential. Be More Predictable Forecasting comes up time and time again as something that creates tension between the customer and the vendor. Customers will say that markets are volatile and their consumers are fickle, so they can't predict the future. They don't have a crystal ball, so they won't provide a forecast. That's fine, but even if you can't see the future, you should have a good handle on the past. And while past performance is no guarantee of future performance, it is a pretty strong outline indicator. Sharing past trends with your vendor and assessing what events have impacted on those trends, will give everyone a sense of what is going on and a sense of involvement. Provid- ing information that will impact on your sales numbers in a timely fashion will also allow for a more manageable and planned supply chain approach. Communication is essential. You should in- volve your vendor frequently and early, letting them know when you expect a potential spike or drop off in demand, and tell them why. Let them know if you're looking at a new market or perhaps launching an offer that will bring in additional orders for a particular line. Give the Customer Plenty, but not Everything There's a lot of talk right now about mass customization, or the lot size of one. Products that can be ordered online and customized to the consumer's whim seem to be de rigueur. But what level of customization will enhance your sales and what level will give you and your sup- ply chain an unnecessary headache? Look carefully at the volume you expect to produce and the variations you want to offer. These may seriously affect the efficiency of the manufacturing process and the supply chain, as well as the total landed cost and the fulfil- ment cost of products. A couple of colors may be a great idea and may make your products appeal to more people, but does offering every color of the rainbow do anything more than that? Look at the Apple iPhone 6: two or three memory sizes, in silver, black or gold, and a sup- ply chain that produces millions of units every week. There's a reason they don't offer 10 dif- ferent colours and it's not simply because they don't have to. If you are going down the mass customiza- tion route or even down a route of multiple FeAture CuTTING COST, NOT PRICE continues

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