Inventory Reduction Generates Savings Key to Stimulus Funding Success
Although the stimulus has very few direct funding benefits to manufacturers the key is to follow the money flow. Some funding will be by the federal government, but the majority will be distributed through the states and local governments. The key for manufacturers is to be able to a supplier to the companies that directly benefit from the stimulus. Utilities developing alternative energy will require manufactured parts and components to build new energy sources (wind, solar, and biofuel); highway projects will require manufactured parts and components, as well as heavy equipment and maintenance or replacement parts for equipment. Companies need to know which companies are applying for stimulus funding and/or being awarded projects and take actions to be a supplier to them. Reaching out to state and local governments to get information on how funds are being used will be required. To capitalize on the stimulus companies will be need to approach this with the same vigor and persistence used in winning new customers.
One area where manufacturers and distributors could get direct funding is for training which will be available through state workforce programs – this funding could be used to retrain employees in lean manufacturing techniques and statistical process control as well as other training programs to improve employee skills. Systems suppliers should partner with manufacturers and distributors in applying for training funds which could include the investment in the software needed.
Consideration for funding should be taken for anything green (alternative energy, green construction, environmental improvements, and battery technologies.) Construction of any type, in particular infrastructure related, should qualify for stimulus.
According to Narayan Laksham, CEO of Ultriva, the lean leader based in California, “Even though the ‘lean philosophy’ can permeate the corporation in terms of process changes and improvements, one area where it has immediate impact is inventory management. Ultriva is interested in manufacturing and distribution companies obtaining stimulus funding or being suppliers to companies that get stimulus funding because a healthy economy is good for everyone, including our clients.”
Companies applying for Stimulus funding should utilize the Ultriva Lean Assessment Tool which helps material managers and supply chain replenishment and purchasing professionals to understand the pain points – most constrained inventory loop, variability of consumption patterns, recurring part shortages and failing supplier performances; users upload parts histories (ideally six to twelve months of historical data), and then the software performs an inventory sizing analysis to identify specific parts that could be optimized through inventory reduction. Users can view graphs of their current replenishment patterns compared to potential opportunities and perform ‘what-if’ simulations by varying lot sizes, lead times and safety stocks. The tool identifies the low hanging fruits that can tackled with the stimulus funding to reap big bottom line benefits.
Ultriva (www.Ultriva.com) is live at over 125 plants across 10 countries. Companies like Emerson, BE Aerospace, Trane, Ingersoll-Rand, McKesson, AO Smith, Thermo Fisher, Rexnord, FRANKE and AGCO among others are using Ultriva to collaborate with over 4000 suppliers and transacting $1.5 billion of purchased parts every year.
- Laksham insists, “Companies will be embracing best practices to turn around their business using the stimulus funding. Ultriva tools help companies to systemize, sustain, and scale these lean practices across the corporation thereby guaranteeing on-going long term benefits. Since companies receiving stimulus funding must show a complete trail of savings achieved, Ultriva provides built-in analytics and continuous improvement metrics. On average, companies that use Ultriva’s lean execution suite achieve inventory savings of 30% to 50%, which implies a very good ROI for implementing a consumption-driven replenishment methodology.”
Ultriva
Cindy McGowan
408.248.9803
About the Author:
Professional Marketing Firm for the Manufacturing Community and Manufacturing Journalist to most manufacturing magazines
Article Source: ArticlesBase.com - Inventory Reduction Generates Savings Key to Stimulus Funding Success