How to Simplify Global Supply Chains

Last week, we took a look at how EXALEAD OnePart can save designers time. The savings can be huge. Some estimates put the average amount of time a 3D CAD designer spends on duplicating existing work at up to 80%.

But design time is just one part of the cost equation when looking at the issue of duplicate parts. In fact, it turns out that it’s usually the smaller cost.

When you start looking at even a modest global supply chain, complexity can add tremendously to both hard and soft costs—as well as time to market.

Lowering the number of parts that your organization needs in stock means savings at the production, storage and after-sales service levels.

An LMI study** performed for the U.S. Department of Defense estimates that each new part SKU added to inventory costs $27,500 on average.
For a company that with 1 million parts, the burden of maintaining unidentified and duplicate parts can easily reach $200 million. Of course, every organization (and every part) is unique. Depending on the complexity of the parts involved, your supply chain, etc., costs could be significantly higher.

Breaking down the costs of duplicate parts

Beyond design time, adding an unnecessary part into your global supply chain creates many costs:

The manufacturing and materials cost of the duplicate parts themselves

This is the most obvious of the hard cost savings. Obviously the costs of manufacturing additional parts depends upon the numbers needed, the material cost and the complexity of manufacture.

Inventory and storage costs

As part numbers rise into the tens and hundreds of thousands of individual parts, the complexity of tracking and storing these parts, where and when they are needed, increases exponentially.

Lean manufacturing and just-in-time inventory techniques can drive down the cost of actual storage … but the delicate timing needed makes the overall manufacturing process more dependent upon a careful global orchestration of parts, delivery and accurate inventory tracking.

Production and logistical complications

An additional duplicate part does not just have to be designed (again), manufactured (again), stored (additionally), but it is also one more SKU. And one more SKU may need to be manufactured in one part of the world such as China, and shipped to regional manufacturing centers in Asia, North America, Europe and elsewhere.

If that additional SKU is the one that gets delayed at a border crossing, stuck in a port or just plain lost … the manufacturing process for the entire end product can be delayed … resulting in thousands (or millions) of dollars of lost revenue.

Consider that if that part already exists, then it likely doesn’t need to be shipped to the manufacturing centers at all … as it is likely already inventoried on-site.

Quality control costs

Finally, we can’t talk about manufacturing in the 21st century without taking quality control into consideration. Every new part number is one more quality check, one more audit box, one more point of potential failure.

Duplicate parts are bad!

But you already knew that duplicating parts is bad didn’t you? It’s hardly a revelation that the reuse of parts is an important element in manufacturing efficiency. The problem has always been in the execution. How do you enable thousands of globally dispersed engineers and designers to easily access an equally globally dispersed treasure trove of part designs spread across dozens or hundreds of semi-digested subsidiaries?

A solution we can endorse

Frankly, until we came across EXALEAD OnePart, the best solutions we’d seen were expensive and somewhat spotty homegrown systems backed by a deliberate and almost forceful culture of reuse. The additional management emphasis on reuse was needed because (although expensive) the homegrown systems were hard to use. So many designers found it easier to start from scratch.

EXALEAD OnePart is a better solution. It’s easy and comprehensive enough that engineers and designers will quickly embrace it. As commercially licensed software, it receives regular updates and a much lower commitment of initial and ongoing capital investment than a homegrown solution.

We liked the solution so much, we’ve partnered with 3DSMAN, a Dassault reseller, to be able to offer it to 3HTi’s customers. Give us a call at 866-624-3HTi or email us at sales@3hti.com and let’s discuss how EXALEAD OnePart might be the best solution for your organization to start reusing parts and saving money.

Next week, we’ll take an in-depth tour of the ROI of EXALEAD OnePart.

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One Response to “How to Simplify Global Supply Chains”

  1. What's the ROI on Reusing Parts?

    […] This is the third of three blog posts introducing EXALEAD OnePart to the 3 HTi community of industrial designers and manufacturers. Read part one Stop Creating Duplicate Parts and Increase your Engineering Capacity, and part two How to Simplify Global Supply Chains. […]

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