Senior Editor
- FMA
- The Fabricator
- FABTECH
- Canadian Metalworking
Categories
- Additive Manufacturing
- Aluminum Welding
- Arc Welding
- Assembly and Joining
- Automation and Robotics
- Bending and Forming
- Consumables
- Cutting and Weld Prep
- Electric Vehicles
- En Español
- Finishing
- Hydroforming
- Laser Cutting
- Laser Welding
- Machining
- Manufacturing Software
- Materials Handling
- Metals/Materials
- Oxyfuel Cutting
- Plasma Cutting
- Power Tools
- Punching and Other Holemaking
- Roll Forming
- Safety
- Sawing
- Shearing
- Shop Management
- Testing and Measuring
- Tube and Pipe Fabrication
- Tube and Pipe Production
- Waterjet Cutting
Industry Directory
Webcasts
Podcasts
FAB 40
Advertise
Subscribe
Account Login
Search
Lean thinking: Quality first, delivery second, price third
- By Tim Heston
- December 5, 2011
Tomorrow’s agenda at LeanFAB includes a plant tour of a local metal service center as well as several sessions on lean manufacturing’s effect on supplier relationships. Managing those supplier relationships, some manufacturing managers seem to be putting quick delivery before price. As just one example, Lynn Benishek, materials manager at Milwaukee, Wis.-based Phoenix Products, told me the company rates suppliers on quality first, delivery second, and price third. If a supplier offers Benishek a quantity discount, she usually doesn’t take it unless she knows Phoenix can use that excess inventory immediately. Instead, Benishek prefers to use (when possible) local suppliers that can deliver quality products in small quantities at a moment’s notice.
Earthquakes, floods, and political unrest have made 2011 stressful for supply chain managers. Considering all these black swan events, you might think companies would be building inventory buffers galore. FMA’s Economic Analyst Chris Kuehl explained that this has happened to some degree. As he stated during a talk at the FABTECH trade show last month, warehouse construction is on the rise.
But according to the latest manufacturing report from the Institute for Supply Management, inventory levels continue contracting. Meanwhile, new orders have jumped significantly, by more than 4 percentage points. As one survey respondent in the fabricated metal products sector put it, "Japanese auto production has returned to 100 percent, and domestic manufacturing continues to increase."
Perhaps the most telling comment came from an electrical components OEM: “Thailand floods [are] impacting our business. Honda and Toyota cut production forecasts, and we are chasing some components made in Thailand.”
Would this manufacturer be chasing components if they were made down the street?
Various continuous improvement efforts aim essentially to speed overall manufacturing time, between the purchase order and the final customer payment. A big part of this involves eliminating wait time. The longer raw stock and work-in-process sit on the floor, the greater the overall manufacturing time.
Larger order quantities, of course, produce larger raw stock inventories that sit for longer periods. As Benishek has found, even a large price cut for greater quantities doesn’t outweigh the money saved from reduced overall manufacturing time. Busy people and machines don’t make the company money, she said. In fact, they spend money. Instead, Benishek watches the shipping dock. The more frequently Phoenix delivers orders, the better business is--because those orders do make money.
subscribe now
The Fabricator is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The Fabricator has served the industry since 1970.
start your free subscriptionAbout the Author
Tim Heston
2135 Point Blvd
Elgin, IL 60123
815-381-1314
Tim Heston, The Fabricator's senior editor, has covered the metal fabrication industry since 1998, starting his career at the American Welding Society's Welding Journal. Since then he has covered the full range of metal fabrication processes, from stamping, bending, and cutting to grinding and polishing. He joined The Fabricator's staff in October 2007.
- Stay connected from anywhere
Easily access valuable industry resources now with full access to the digital edition of The Fabricator.
Easily access valuable industry resources now with full access to the digital edition of The Welder.
Easily access valuable industry resources now with full access to the digital edition of The Tube and Pipe Journal.
Easily access valuable industry resources now with full access to the digital edition of The Fabricator en Español.
- Podcasting
- Podcast:
- The Fabricator Podcast
- Published:
- 03/26/2024
- Running Time:
- 67:51
This week on The Fabricator Podcast, Jason Becker, host of the Arc Junkies Podcast and owner of Underground...
- Trending Articles
USS Midway’s tuition-free welding program a win-win
San Diego landmark becomes floating classroom for student welders
K&S celebrates 50 years in business
Guiding metal fabrication’s automation transformation
Increasing revenue by applying production concepts to sales and marketing
- Industry Events
Coil Processing Workshop & Tours
- April 2 - 3, 2024
- Corpus Christi, TX
GOLF4MFG South
- April 15, 2024
- Charlotte, NC
16th Annual Safety Conference
- April 30 - May 1, 2024
- Elgin,
Pipe and Tube Conference
- May 21 - 22, 2024
- Omaha, NE
World-Class Roll Forming Workshop
- June 5 - 6, 2024
- Louisville, KY