Top 5 Trends Impacting OEMs in 2017

1.

Uncertain commodity prices: Copper costs (COMEX index) have vacillated from a low of $2.50
to a high of $2.80 in the past 6 months.1

2.

Demand growing/skilled labor shortage: 75% of manufacturers report a moderate to severe shortage
of skilled resources.2

3.

Lean/efficiency goals: 82% of executives plan to cut costs to fuel goals.3

4.

Inventory: Raw material and WIP inventories are increasing with lower turns.4

5.

Cost reduction: Enterprise cost reduction is a strategic priority at 55% of companies.5

1. COMEX; 2. Accenture study; 3. Accenture; 4. US Census; 5. Hackett Group

Our Operational Efficiency Model (OEM)

Anixter’s Operational Efficiency Model can help you face these headwinds. Turn these challenges into opportunities by leveraging best practices to improve efficiency and lower costs.

We can help you:

  • Find alternative parts with the help of our application engineering team
  • Optimize plant labor with product enhancement solutions
  • Optimize the flow of raw material to cells/lines and sites globally by leveraging Anixter’s inventory management solutions
  • Meet working capital and total cost of ownership goals with proven savings strategies

Here's how we helped one OEM achieve greater operational efficiency

CHALLENGES

  • No global uniform process or platform tor procurement to manage class C inventory
  • 5,500 SKUs purchased from 60 suppliers in hundreds of points-of-use per location, across nine sites globally 
  • Inventory not mated to MRP demand with less than three turns 
  • More than $500,000 in excess/obsolescence 
  • No inventory visibility and limited controls to track usage by site/cell 
  • “Expensed” spend on low cost items representing more than 2% of COGS
  • Downtime and reduced production efficiency due to raw material flow
  • Difficulty managing quality across vendors

SOLUTIONS

  • One provider and procurement methodology globally
  • 5,500 SKUs purchased from one supplier deployed to hundreds of points-of-use per location, across nine sites globally 
  • Inventory optimized and mated to demand, reducing on-hand inventory by 25% 
  • Inventory turns increased from 3 to 7 times
  • Hoarding and waste reduced through minimum/maximum and usage reporting per point of use
  • “Expensed” spend on low cost items reduced to less than 2% of COGS 
  • Zero downtime and increased production efficiency
  • Quality control rating of more than 99% (RoHS, REACH and Certificates of Compliance)
  • Working capital improvement of 10%
  • Yearly cost reduction averaging 4%

Are you ready to face these headwinds and navigate towards operational efficiency?

Complete the form below to request a call from our experts.