The customer - a branch of a leading wind power industry enterprise in China, is facing series of challenges brought by a rapid expansion of production capacity while making efforts to meet the strong demand of the market. To sustain this growth, the customer expanded its supplier base of indirect materials which directly related to the products to more than 60 suppliers, and had no transparent price information which cannot support the annual cost reduction requirements. According to the McKinsey’s report, the customer’s single order operation cost is about 500 yuan, and On the other hand, the work area became a limited factor to the expanded production capacity, so reducing the indirect material storage area turned into an attractive option.
Cribsolution proposed a customized JIT solutions based on the Cribsolution’s supply chain and indirect materials management system - Cribsolution System® after tracking and evaluating the plant's current operation and requirements. Critical segment of the solution is the on-site implementation and application of Cribsolution System®, Cribsolution achieved the consolidation & optimization of the plant’s original suppliers, transparent material and price information, and real-time transaction information sharing. In daily operation, Cribsolution replenished the plant’s crib from Cribsolution local warehouse according to the end users’ picking quantity day by day, and forecasted the plant’s requirements based on historical picking data proactively to reduce the customer's acquisition cost.
After nearly one year operation, as to the indirect materials within the solution: the company's total cost of ownership (TCO) decreased by 8% while the quantity of the purchase orders reduced by 70%, the single order operation cost declined by about 200 yuan; and the plant maintained only 2 days usage of the indirect materials for onsite stock, expanded the usable area of the plant, meanwhile, the repetitive used materials‘ lead-time which delivered to the production line had been significantly reduced to average 2 hours level.