There’s Benefits in Purchasing Higher Level Assemblies
Purchasing managers and their counterparts have days filled with tedious activities which include supplier evaluations, plant visits, contract negotiation, Engineering fiascoes, all while maintaining database records. The more suppliers and parts that a purchasing department is managing leads to a more cumbersome workload with endless tasks that need to be accomplished.
1. Simplified Purchase orders
2. Reduced Management of Sub-Suppliers
As stated in the previous section, managing a large amount of suppliers from an even greater number of BOM parts is extremely time consuming. When you choose a Contract Manufacturer with a breadth of capabilities, this can easily be mitigated. Contract Manufacturers manage all parts within their own capabilities, and then manages their own supply base of sub-tier suppliers for secondary ops. Built into the CM’s overhead, the company can manage everything within the project’s supply chain so that the OEM customer does not have to be burdened with a tedious workload.
3. Reduced Supply Base
Having been in the industry for decades, PEKO has seen plenty of OEMs that are trying to significantly reduce their supply base. Many OEMs have ended up with a database full of suppliers which is costly to maintain due to audits and other correspondence. This management is usually handed over to the purchasing department to greatly reduce the number of suppliers in database so that only the best and most capable will be used in the future. The easiest way for a company’s purchasing group to reduce the number of suppliers in their database is to choose a High-Level Contract Manufacturer with a Vertical Integration approach.
For example: When an OEM chooses a company like PEKO to be their Contract Manufacturer, we provide our customers with:
This all leads to our clients’ purchasing department managing one clear and concise PO from us while we manage their entire mechanical assembly through to its entirety.
4. Easily Calculated Landed cost
Many Purchasing Managers are finding the ease of switching to a Contract Manufacturer for their major mechanical assemblies. With simplified POs, a managed supply base, reduction of suppliers and an easy to determine landed cost of product, the advantages are clear. For more information on how PEKO can help save the sanity of your purchasing department, click the link below!