With component shortages, however, time (a proven inventory managers' foe) leads to scarcity, exposure to appalling production line downtime situations, and increased cost. When demands unexpectedly change, or delivery, quality, or availability problems arise, buyers must rush to the open (broker) market to source components wherever they can. Sure, one can logically turn first to a 24x7 intranet marketplace within the global service organization, whereby each location can advertise excess spares inventory or flag shortages to all other locations. If there were such a portal platform, it could automatically e-mail other registered member locations to notify them of the shortage. Should an alerted location have the needed inventory, it can enter a "bid" for the shortage, triggering an automatic e-mail to the buyer that a "bid" has been made. The buyer then accepts the bid, and the inventory is sent out to the buyer.
But, unless there is some spares inventory in another service organization within the company (often without a viable way for anyone to know about it), the company's buyer must go to the open market to source it in a firefighting fashion. Yet, seldom are companies more exposed to price gouging than when they have exhausted all internal inventory sources and must resort to the open market to source their needed spares—fast and desperately. Manufacturers that deal with clever and well-versed brokers one-on-one typically are outwitted whether they want to sell or buy something. The problem of not following a specific procedure (other than buyers following their own instincts and preferences) is often compounded by a broker diversity based on the personal relationships of new buyers joining the buying team. Further, there is often no transparency in quotations (owing to phone and e-mail correspondence mostly). An added confusion is with the mapping of the internal part number versus external vendor part number, along with alternative component cross-numbers that have been approved by the engineering department on the approved supplier list.
There is always the option of having some hedge inventory, a form of inventory buildup to buffer against some unpredictable event that may not happen at all. Hedge inventory planning involves speculation related to potential labor strikes, price increases, unsettled governments, and other events that could severely impair a company's strategic initiatives. However, risk and consequences are unusually high, and top management approval is thus often required. Again, a more elegant solution could be a buyer portal acting as a private reverse auction or bidding platform that allows the company to go to the open market and solicit as many sources as needed to ensure competitive bidding, yet go anonymously under the banner of the portal provider.
That is to say that, as a surrogate bidder, service providers like FreeFlow would buy the products in its name on behalf of the user company, and drop-ship the products to the client (see Drop-Shipping—Internet Retailers' "Little Helper"?) so that the user company's identity alone does not signal an opportunity for runaway prices. The service provider could even conduct some quality control, value-added services (packaging, testing, etc.) should user companies need them. Ideally, the buying and selling portal should be fully interfaced with the engineering department so that the buyer simply keys in the required internal component number and the portal would then populate the appropriate external vendor part numbers that are required. Also, a full audit trail should be provided for each purchase, whereby a multi-digit bid number is assigned to every bid that a broker logs into the system. In this case, a purchase order (PO) would not be issued until a bid number is submitted into the system by the buyer. Occasionally, there would be a need for an optional secondary bid approval should approval from the engineering department be needed.
But, unless there is some spares inventory in another service organization within the company (often without a viable way for anyone to know about it), the company's buyer must go to the open market to source it in a firefighting fashion. Yet, seldom are companies more exposed to price gouging than when they have exhausted all internal inventory sources and must resort to the open market to source their needed spares—fast and desperately. Manufacturers that deal with clever and well-versed brokers one-on-one typically are outwitted whether they want to sell or buy something. The problem of not following a specific procedure (other than buyers following their own instincts and preferences) is often compounded by a broker diversity based on the personal relationships of new buyers joining the buying team. Further, there is often no transparency in quotations (owing to phone and e-mail correspondence mostly). An added confusion is with the mapping of the internal part number versus external vendor part number, along with alternative component cross-numbers that have been approved by the engineering department on the approved supplier list.
There is always the option of having some hedge inventory, a form of inventory buildup to buffer against some unpredictable event that may not happen at all. Hedge inventory planning involves speculation related to potential labor strikes, price increases, unsettled governments, and other events that could severely impair a company's strategic initiatives. However, risk and consequences are unusually high, and top management approval is thus often required. Again, a more elegant solution could be a buyer portal acting as a private reverse auction or bidding platform that allows the company to go to the open market and solicit as many sources as needed to ensure competitive bidding, yet go anonymously under the banner of the portal provider.
That is to say that, as a surrogate bidder, service providers like FreeFlow would buy the products in its name on behalf of the user company, and drop-ship the products to the client (see Drop-Shipping—Internet Retailers' "Little Helper"?) so that the user company's identity alone does not signal an opportunity for runaway prices. The service provider could even conduct some quality control, value-added services (packaging, testing, etc.) should user companies need them. Ideally, the buying and selling portal should be fully interfaced with the engineering department so that the buyer simply keys in the required internal component number and the portal would then populate the appropriate external vendor part numbers that are required. Also, a full audit trail should be provided for each purchase, whereby a multi-digit bid number is assigned to every bid that a broker logs into the system. In this case, a purchase order (PO) would not be issued until a bid number is submitted into the system by the buyer. Occasionally, there would be a need for an optional secondary bid approval should approval from the engineering department be needed.
No comments:
Post a Comment