The last two years have highlighted the need for flexible and agile supply chains, with disruptions from Covid, Brexit and Ukraine triggering rising material costs and component shortages. According to Make UK’s 2022 report on Building Global Resilient Supply Chains, two in five manufacturers are investing 10% more into their supply chains, with 34% citing faster response as the top advantage of doing so.
Maintaining a healthy supply of stock is a difficult balancing act. Order too little and you end up caught short, leading to expensive downtime and missed customer orders. But, order too much and you impact cash flow and are stuck with costly excess inventory. Kanban methodology takes steps to address this, by storing reserve stock that can be released when active stock runs out. However, manually checking stock levels is time consuming and prone to inaccuracies; manufacturers may stock thousands of different component types. If something is missed, the manufacturer risks delays on component availability, threatening production. In addition, determining how much to order depends on demand ─ in today’s market, demand is ever changing and difficult to predict.
The component ordering process can be greatly enhanced with automated replenishment solutions, a system where automated technology monitors stock levels and manages the reorder process. This approach is particularly beneficial in a vendor managed inventory (VMI) environment, where a third-party company takes responsibility for a manufacturer’s component supply. With automated replenishment, the VMI partner gains greater visibility to help maintain stock availability and forecast demand. With orders coming in through a central software platform as and when needed, the VMI partner can more easily and accurately fulfil orders, as well as order future stock further in advance according to forecasted demand.
There are multiple solutions available to improve the replenishment process, based on different technologies with varying levels of automation. For example, manufacturers can opt for an active tag solution that connects to a BLE Gateway. When taking components from a bin at the point of use, the user can scan the bin with a smartphone app, which communicates with cloud-based software. This creates a record of when parts were accessed for easy reporting. In addition users can simply press a button on the bin to reorder components in a predefined quantity. The order process is greatly streamlined, and paper free.
Another option is to install scale-based technology at the point of use. Bins can be pre-set to understand exactly how many components are present based on their weight. When stock levels drop below minimum, the bin can communicate with cloud-based software to make the reorder automatically, preventing stockouts. This eliminates the need to count stock entirely, as well as removing the need to manually scan or count bins ─ continual weighing means there is an accurate inventory count at all times.
A third option is TwinBin Live, which uses Smartie BLE technology. As with a traditional TwinBin system, both top and bottom bins are fully stocked. When the bottom bin is empty, the user pulls a slider to release the contents of the upper chamber into the lower one. This will break a switch, activating a BLE beacon to send a replenishment message and create an order automatically.
Which technology is most suitable for an individual manufacturer will depend on the type of parts, the location, the inventory strategy and more. An experienced VMI provider can talk through the options and explain which are suitable for the customer’s production line.
The benefits of automated replenishment
The primary benefit of this approach is immediate and continual supply of materials to the point of use, ensuring parts are always available when needed and preventing downtime. In addition, manufacturers are better able to cope with periodic or seasonal demand, and can order the optimal stock quantities without manual checks or paperwork, improving productivity and efficiency.
The removal of manual checks, reporting and data entry dramatically reduces the possibility of human error, as well as freeing up valuable staff time. The wider impact of stock availability means that manufacturers can confidently fulfil customer orders, improving satisfaction and the reputation of the business.
“Automating the replenishment processes frees up time to focus on more value-adding activities that unlock growth,” explained Andy Ingram, sales director at inventory management solutions provider Inventor-e. “If there is a rush of demand on certain products and manufacturers suddenly need to use more stock, they no longer have to worry about how long it will take a distributor to deliver the new supply of components. It removes the element of surprise — manufacturers can be confident in a reliable flow of stock.”
With the impact of Covid, Brexit and the conflict in Ukraine affecting the industry’s ability to maintain stock, incorporating automated replenishment technology into your facility as part of a VMI Smart Solution can bring powerful benefits. With 40 per cent of manufacturers already investing more heavily in their supply chains, automated replenishment technology looks set to play a key role in maintaining British manufacturing productivity.
