Inventory Management for Custom Electronics

Many customers see and hear our offer to schedule inventory on their behalf but few customers take full advantage of the offer to its fullest extent.  There are those, however, who do take full advantage of the offer and see their cash flow and cost of good sold improve as a result.

Case in point, we have an electronics manufacturing (EMS) customer in the west who buys from us on a regular basis. We have been a PCB manufacturer for them for just over 5 years now.  They have a customer that orders thousands of Printed Circuit Boards every year.  They typically place an order that looks like this:

  • Total order = 320,000 units
  • Total duration of order = 6 months
  • Typical releases = 53,000 per month shipped by a PO schedule
  • Billing terms = Net 30 for consigned material
  • In-house Store = Yes.  Inventory is readily available in their warehouse and billed usage based on the PO schedule and not to exceed set set time frame

Did you read that right? Yes. We schedule their inventory and it is stored AT their facility (program approved on case by case basis). If you can’t see how this helps your business in dramatic ways, let me lay it out for you:

  • 1 Time Purchase – you are getting the benefits as if you were ordering this from the factory with a 1 time production run.  Most factories do NOT discount custom fabricated circuit board manufacturing, even if scheduled, if there is more than one production run involved.
  • Cost Savings – this method can save you in numerous ways:
    • Again, lowest cost for 1 time production run
    • Purchase 6 months to 1 year’s worth of inventory – but pay for it monthly
    • Lower import fees
    • Fewer shipping fees
    • Lower overall shipping costs because of bulk rates
    • NEVER PAY EXPEDITE FEES again because you have the inventory available at our warehouse (in-store style programs are customized and uniquie and don’t apply in all situations)
    • Less work for your buyers or expediters because your product is already available
  • Purchasing Power – if you know the schedule, you can take advantage of the highest price breaks available for volume purchases
  • CASH FLOW – this is improved in many different ways:
    • Allow us to be the bank on the front end.  We cover the costs of the inventory from the factory  to our warehouse
    • Net 30 terms – there no off-shore firms who will give you credit terms and most require prepayment before starting a project.
    • USA transactions – few people realize the fees of going offshore and dealing with a U.S. based firm eliminates those fees

 

Can you stock my low volume products?

Think we only do printed circuit board programs for our high volume customers – this is not the case.  In fact, we have a customer that has over 20 part numbers and they do not order more than 200 pcs at any given time.   We stock, manage, ship, organize and use our MRP system for this customer who very seldom sends us a reporting or schedules. We understand their usage and alert them when it is time to reorder – it is all based on our MRP software and experience with managing inventory – and a personal touch.

Keep in mind that we can manage inventory for PCBs, flex, rigid flex or any Aluminum based PCBs.  We don’t carry inventory over 6 months so a customer has to make sure their PO stays within few guidelines.

There is no reason you should not be taking advantage of our system.  We can save you money and improve your cash flow and improve your delivery schedules.  Just give us a call to discuss and we will be an inventory management partner for your business.

 

Leave a Reply

Your email address will not be published. Required fields are marked *