Driving Down Cost in the Supply Chain

Reading time ( words)

Driving cost out of the supply chain goes beyond reduction of raw material cost. Though many of the manufacturers today concentrate on negotiation with their raw material supplier(s) the hidden cost of internal supply chain goes undetected. To address the cost of the entire supply chain we should not only look at direct material cost but also the cost of internal supply chain. At Epoch we looked at four areas in particular which include: planning/tracking, storage/delivery, inventory management, and supplier relationships. 

Planning and Tracking
At Epoch International, a provider of engineering and manufacturing services to diverse customers in such fields as telecommunication, automotive, medical, etc., this challenge becomes more acute due to various sizes and diversity of production that we run daily. Due to the vast variety and number of components used in various product lines, Epoch realized early on that, without any ERP tool, it would not be humanly possible to manage the entire supply chain. Epoch has been utilizing Oracle EBS suite since the early 2000s to operate its entire business operations.

To further enhance its internal supply chain it has augmented the ERP with a series of in-house designed interface modules. One of the early modules designed was a “barcode interface module.” This system has allowed the removal of all the manual entry into the ERP system by merely scanning the material as it moves from point of entry to the production floor. This system is very much integrated with the in-house developed MES system that monitors the movement of the product/material throughout the production stage.

Storage and Delivery
One area of cost that has been addressed by Epoch is the movement of raw material back and forth from inventory to production site. This has been achieved through the implementation of an environmentally controlled Point of Use Smart Cabinet. The company has deployed a series of these smart cabinets that is designed and patented by Epoch right at the point of use of the production. Bringing the inventory right to the production floor eliminates all movements back and forth between inventory and production. This also reduces the number of inventory staff since parts are picked by the production staff utilizing its fully automated locator and FIFO dispensers. The smart cabinet is fully integrated with the ERP system ensuring full control of the inventory. Since the implementation of the smart cabinet six years ago, Epoch has doubled its inventory material line items without increasing any head count on its material management team.

To read this entire article, which appeared in the April 2021 issue of SMT007 Magazine, click here.



Suggested Items

ProMetrics: An Easy, Smart Solution

01/05/2022 | I-Connect007 Editorial Team
Rehm's Michael Hanke speaks about the product on process and the advantages of live process monitoring with ProMetrics, Rehm’s newest monitoring tool, which is brand new and unique in the market. Users say that it’s easy to use and, more importantly, that it provides the security in a system they are looking for.

SMTAI 2021: Rob DiMatteo Turns Up the Heat at BTU

12/15/2021 | Nolan Johnson, I-Connect007
At SMTA International 2021, Nolan Johnson spoke with Rob DiMatteo of BTU International about the current shift in market drivers, pain points from customers, and what he expects to see in the near future. Chip shortages and port delays are just two of the challenges facing BTU’s customers. As general manager of BTU, DiMatteo wants his company to excel at customer service despite these challenges. He also previews a new flux management technology for keeping reflow ovens extremely clean, calling it a significant breakthrough.

5 Keys to Smart Process Success

01/28/2021 | Steve Williams, The Right Approach Consulting LLC
Smart factories require the core underlying processes to be connected and “talking” to generate the data necessary to make real-time process decisions, that is, the IIoT (Industrial Internet of Things). In a truly connected factory, an ongoing continuous dialog between machines, business processes, suppliers and customers is happening in the background. This dialog is not only interactive, but proactive, as a constant stream of real-time data is tweaking and adjusting processes to drive improvement. It also provides time-critical information on how processes are operating, supply chain pipeline, and delivery status updates—all based on data.

Copyright © 2022 I-Connect007. All rights reserved.