3 Things You Should Know About VMI
Posted: January 24th, 2012 | By: Eagle Tech
Companies practicing lean manufacturing can benefit highly from vendor-managed inventories, or VMI. Unlike traditional inventory management, a VMI arrangement is between two companies. The arrangement is used to lower the cost of inventory for the customer companies. It is also a way for the manufacturers of the inventory to help supply the companies as needed. However, there are only three things that you need to know about VMI relationships and how they work.
How They Work
There are two parties involved: the manufacturer of the inventory, and the retailer, distributor or another manufacturer who actually owns the inventory. The original manufacturer holds the goods until they are needed by the customer (the manufacturer, distributor or retailer) requests more inventory. Special arrangements allow the original manufacturer to send shipments based on information gathered about the customer. The customer company agrees to accept the shipments, because their inventory should technically require stocking. VMI arrangements are used by companies large and small to greatly reduce lag time in supply chains. However, the system requires detailed synchronization of your point-of-sale information.
The original manufacturer of the inventory must know how much to produce and when. To accomplish this, they must use some of the same methods that its customers would use when storing their own inventory. The point of sale information from retailers tells the inventory manufacturer when goods are sold and the number of goods sold. Retailers using the VMI system must be willing to share this information in order to make the most out of the relationship. Manufacturers who use VMI share their production schedules, while distributor customers share their “ship-to-stock” information.
Moving Merchandise is Key
The successful use of marketing and sales campaigns are essential for moving the inventory through the systems. The VMI system does not work properly if the previous inventories are stuck in the storerooms. Companies should make a new marketing and advertising campaign a priority when beginning a VMI system. Companies entertaining vendor managed inventory should consider the importance of sharing information with the vendor and also becoming aggressive in moving the inventory. These points, along with an understanding of how the system works, can make the VMI experience a positive (and profitable) one.
Eagle Technologies Group is an industry leader in the design and installation of factory automation systems worldwide.
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The manufacturing sector outlook for 2012
Posted: January 17th, 2012 | By: Eagle Tech
The year 2011 was marked by protests of corporate America, which occupied headlines for much of the
year. Global concerns over the growing debt crisis in Europe made manufacturers in the U.S. Fear for
their export sectors—and their profits. The government’s failure to act on many expiring credits and
incentives didn’t make things any better. Despite these obstacles and the recovering U.S. economy, the
manufacturing industry ended 2011 on a high that is expected to roll over into 2012.
Year End 2011
Despite the political and economic turmoil that all industries saw in 2011, the manufacturing industry
grew steadily throughout the year. December 2011 saw a growth of 3.3 percent in both employment
and production in manufacturing. The increase in employment is a great sign in a nation where millions
are still out of work and seeking relief. There were concerns that the export sectors in manufacturing
would suffer because of the debt crisis that seemed to take over the European economies. However,
such fears were apparently not as relevant in 2011, as the growth in production rates show.
2012 Predictions
The growth in production and employment is expected to continue through 2012. The Manufacturer’s
Alliance for Productivity and Innovation predicts a three percent increase production. This number
is higher than the 2.1 percent increase predicted for the U.S. gross domestic product (GDP). MAPI
further predicts growth in 18 of the 24 sectors that comprise the manufacturing industry. Housing is a
part of that prediction, surprisingly. The housing market has been the basis for much of the economic
turmoil that firms have experienced since the recession in 2008. Growth in this area has much larger
connotations for the economy at large. Energy, industrial equipment and transportation sectors are
expected to lead the 2012 manufacturing growth.
Moving Ahead
The growth in the manufacturing sector is expected to spill over into the next year. In fact, MAPI
confidently predicts a four percent rate for 2013, with 23 of the 24 sectors benefiting.
The general consensus is that manufacturing is marching forward and upward. If the past two years
are any indicator, the rest of the country will follow. Expect a closer look at the manufacturing
sector throughout the year, along with spirited analysis of the production numbers. Historically, the
manufacturing industry is the one that, once it rises, takes all other industries along for the ride. This is
something the country will welcome.
Eagle Technologies group is an industry leader in the design and implementation of factory automation systems worldwide.
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Finding Sustainability is Medical Manufacturing
Posted: January 10th, 2012 | By: Eagle Tech
Sustainability in manufacturing is dominating the manufacturing world, as companies work to reduce,
reuse and recycle in any way that they can. The reusable products sector that provides shipping
equipment is one solution that continues to take a foothold. Redesigning plants for better use of space
(and reduction of energy) is another. Many companies are even looking into ways to incorporate
renewable resources in providing energy for the plants. Unfortunately, one sector still remains sluggish
in the sustainable area. The medical manufacturing industry is working on ways to meet sustainability
standards without compromising the most important factor in their business—patient safety.
Concerns
The medical manufacturing industry isn’t intentionally bucking the sustainability trend. In fact, there
are several studies in the works to find more environmentally friendly practices in the manufacture of
medical devices and pharmaceuticals. The efforts all end at the nosocomial infection risk that increases
each time a medical device reused.
Nosocomial infections are those that originate in the hospital. The pathogens carried by patients
coming through the hallways can cause harm to those who recently received surgery or have
compromised immune systems. These pathogens are easily spread when a device or tool is reused
without proper sterilization. Hospitals have used a highly effective sterilization method in the autoclave
for more than a century. However, plastic and other nonmetal objects are destroyed in the autoclave.
It also uses a lot of energy and manpower to operate. The alternative to the autoclave and solution for
nosocomial infection was disposables.
Sustainability in manufacturing is dominating the manufacturing world, as companies work to reduce,
The disposables are cheap to make as many are made of plastics and paper. They are quick to use
as well. The first disposable medical item was the latex glove, developed in 1964. Today, doctors
have pre-filled syringes and other dispensers that deliver a one-time dose to the patient. Yes, the
number of nosocomial infections have reduced, but the amount of waste has increased exceedingly.
Approximately 90 percent of medical device waste is disposable products. Several thousand tons of
waste from disposables alone populate our landfills, as a result of the effort to reduce infection.
Solutions
First, the industry must admit that the disposable device is necessary for the modern medicine. The
Centers for Disease Control and Prevention estimates that 1.7 million people contract nosocomial
infections each year. More than a 100,000 of these patients died from those infections. There is no way
around the progressive need for infection reduction methods. However, the industry can reduce in other
ways to help eventually reach sustainable practices.
The company Farm Design Inc. came up with one way to keep disposables and also reduce waste.
Their new trocar (which is a device used to insert instruments into the abdomen during laproscopic
surgery) is a hybrid of disposal and reusable components. The entire device designed by the Farm is
made is metal with a disposal plastic tip. The metal is re-sterilizable, while the tip must be replaced
with each use. In turning what was once an 100 percent plastic device into a 90 percent metal one, the
company saves in freight costs, fuel and waste, as one metal trocar uses 1,500 uses. More work is being
done to make hybrids out of other medical devices.
The problem is infection and the solution seems to hybridization. It seems that in medical
manufacturing, as in automotive manufacturing, hybrids are primed to save the industry and the
environment.
Eagle Technologies Group is an industry leader in the design and implementation of factory automation systems worldwide.
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Easing a Spare Parts Delay
Posted: January 3rd, 2012 | By: Eagle Tech
A well-stocked spare parts inventory is like a lifeline during a mechanical breakdown. The parts are kept in a nearby storage room, ready for installation immediately. The production line can restart with very little delay in filling orders. Sometimes, however, the part you need is not in the inventory, for one reason or another. Companies who find themselves having to order spare parts place themselves and their production at the mercy of often complex parts supply chain. There are a few ways to prepare for such delays, and make the down time as short as possible.
Know Lead Time Numbers
Every part takes time to manufacture, ship and install. This time must be considered when determining
the amount of time between the moment the part is ordered and when the machines is up and running
again. The time period is different for many parts, so knowing the lead time for each part is essential.
During an emergency, the information can help your reschedule orders and alert customers. The time
delay numbers can also help create estimates that the customer care department can use in reassuring
customers who await their products.
Gather Alternatives
Your vendor may not be the only maker of the machine, and is thus not the only supplier for the spare
parts. Find the contact information for other makers of your spare parts and keep the information
handy. Doing so can help ease the pressure of a spare parts delay due to problems in the vendor’s own
plant.
Make a Transport Plan
Some issues are logistics in nature, caused by various failures in the transportation of parts from the
vendor to the customer. Maintain a plan for transporting the parts using the fastest route, the most
effective, and one that uses various modes of transport, in case one particular method is inhibited by
weather, mechanical issues or even political and economic troubles. Having such a plan ensures that
your company runs no matter what obstacles affect the vendor.
Keep Sources Updated
Manufacturers do discontinue products, including spare parts. Vendors go out of business or change
locations. The best way to avoid being surprised by one of these events is to stay abreast of your
contacts. Check periodically on the status of the vendors and transport companies. Also, pay attention
to all correspondence. Many vendors send notices of discontinued lines to their customers. Update your
vendors on any changes in address and other contact information as well.
Delays in receiving spare parts do occur. Fortunately there are ways that customers can minimize those
delays. It does take a little planning and additional time in maintaining correspondence. However, the
payoff during a breakdown can be immense.
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