3 Simple Ways to Reduce Supply Chain Costs

May 9, 2023

3 Simply Ways to Reduce Supply Chain Costs

As manufacturing leaders search for efficiencies, they run into supply chain challenges. These challenges are literally everywhere.

Supply chain issues (65.7%) are second only to workforce hiring and retention concerns (75.7%), according to an industry survey cited in Supply Chain Dive. In How manufacturers can tackle supply chain costs in 2023 editor Kate Magill says understanding consumer demand and aligning production and inventory is key to reducing supply chain tasks. By so doing, manufacturers can avoid over-ordering raw materials, scale production up and down in key markets based on demand analytics, and minimize discounting to clear warehouses of over-produced or lower-quality merchandise.

However, there are other important strategies to maximize as well:

Maximizing overall equipment effectiveness (OEE): OEE is a non-financial calculation of production rate, quality, and line availability measuring actual output compared to the theoretical maximum (TMax) capability of a production process. OEE identifies the percentage of manufacturing time that is truly productive. An OEE of 100% signifies a perfect shift. Only good parts are produced at 100% quality; at the maximum speed, or 100% performance; and with no downtime (100% availability).

Manufacturers that deploy the QAD Connected Workforce Solution Productivity module drive OEE by 14 points and productivity by 29% in just 90 days. They achieve these gains by working with coaches to baseline OEE, implement new processes, and harness the ingenuity and knowhow of workforces to enable continuous improvement.
Improving compliance with 100% paperless processes: Many firms use paper-based processes for quality checks. Workers weigh products by hand and then enter data into paper logs. This means quality teams have lagging indicators into product quality, and it’s difficult to answer customer questions or conduct recalls.

Manufacturers using the QAD Redzone Compliance module digitize all compliance processes. As a result, they’re able to minimize customer returns and claims, which harm profitability.

T.H.E.M. (Technical Help in Engineering and Marketing), a New Jersey-based contract packaging firm, used QAD Redzone to transition from handwritten to software-driven checks using QAD Redzone. As a result, the company’s staff was able to complete 28,000 compliance checks in five months.

“Before, our teams had to weigh products and log data manually,” says Amy Sena, Vice President of Quality Control. “Now, workers can place products in Bluetooth-enabled scales, which automatically upload data to QAD Redzone. It’s a huge time saver for teams and also shows which workers are doing their checks at the right time.” Workers missed fewer than 3% of all checks and were able to rectify all of them using the QAD Redzone app.

In addition, teams can take photos of products, UPS codes, and packaging to avoid mishaps, such as products getting mislabeled or multiple flavors being placed in one package. Workers can easily scan UPC codes to learn more about each product.

“If you’re a quality manager, QAD Redzone will make your life a lot easier. You can make your company more compliant and successful during audits and retrieve data in seconds.”

Amy Sena Vice President of Quality Control, T.H.E.M.

Creating a culture of continuous improvement: With digital processes, dashboards, and data made available by QAD Redzone, it’s easier for operators to evaluate production conditions and propose productivity improvements. Workers see production data on overhead TVs, on tablets by equipment, and on the QAD Redzone app on their smartphones. Operators can share new ideas using the solution or in daily huddles.

As just one example, as manufacturers deploy the QAD Redzone Reliability module, supervisors select “doctors,” or operators who take on new maintenance responsibilities. These workers are trained to look for issues and work with maintenance teams to proactively address them. That means that issues that may have spanned several shifts now get resolved faster.

With improved reliability, production teams avoid equipment downtime, which harms throughput. They also proactively address issues that could result in product defects, creating waste or second-quality goods that have to be discounted.

By evolving processes with QAD Redzone, manufacturers are able to drive OEE by an average of 37 points over a year and achieve incremental gains beyond that.

Control Key Supply Chain Issues with QAD Redzone

Certain issues, like raw material price increases and logistics snarls, may be beyond manufacturers’ ability to fully mitigate. However, what happens on production floors is within their control.

Want to drive OEE, improve compliance, and unlock new gains through continuous improvement?

Read the QAD Redzone 2023 Productivity Benchmark Report.