Southland Metals was asked by an existing customer to develop a stocking program to reduce the cost of carrying inventory as well as reduce lead times.
A warehouse was located and utilized to stock and manage a 1 ½ month minimum inventory for supplying the OEM production line with 15 different fully machined and assembly ready part numbers. Weekly shipments are made to the facility to support assembly requirements requiring only a 3 day lead time, thus eliminating the customer’s need to place multiple P.O.’s with extended lead-times.
Southland performs a weekly review of the customers 6 month forecast and orders accordingly to maintain the 1 1/2 month minimum inventory levels. By taking on the responsibility of analyzing the customers forecast, placing orders, handling logistics, providing warehouse services, and agreeing to maintain production quantity requirements, Southland’s value added supply chain management proved beneficial to the OEM’s bottom line.