Are you looking for ways to maximize your manufacturing space and improve cash flow? Maybe you’re a fast-growing manufacturer. You urgently need room for more personnel and equipment but don’t have the budget to rent an additional facility. Companies with slower but steady growth face a similar dilemma. Long-term sales forecasts are strong, but where will you store all of the parts that you’ll need without tying up cash in excess inventory? After all, that’s money you could use elsewhere in your business.
Some fabricators and distributors of rubber and plastic products require customers to purchase and receive parts in high volumes. These vendors buy in bulk and offer volume discounts, but they don’t want smaller orders from you or won’t offer competitive pricing for lower minimum order quantities (MOQs). So, the mistake that industrial buyers make is to chase price instead of value. Purchasing Departments buy in bulk to get a lower unit price, but then pass hidden costs along to other parts of the operation.
What’s the Cost of Not Enough Manufacturing Space?
Unfortunately, this procurement strategy can contribute to a lack of manufacturing space. For example, a heavy equipment manufacturer with a spot-on sales forecast can predict the number of door and window gaskets needed for builds. If the manufacturer fabricates gaskets in-house, Purchasing may order high volumes of rubber coils. All of these coils need to be stored somewhere but using your facility to so creates manufacturing waste. It also adds costs – and not just from buying extra shelving units.
If a manufacturer like this doesn’t have enough floor space for assembly, some operations may need to be moved outdoors. Even if you have a large parking lot, would you really want to leave row after row of heavy equipment in the elements when the doors and windows aren’t installed and sealed? There may be good reasons why you can’t complete all of your assembly within the factory (e.g., sales are booming) but running out room because you’re storing too much inventory isn’t one of them.
Carrying excessive amounts of inventory can also cost you time and money inside the plant. Forklift operators who need to the thread their way between boxes can’t work efficiently and may accidentally damage stock. Assemblers who don’t have enough elbow room aren’t as productive either. You can change your facility’s layout to provide workers with more space, but your inventory needs to go somewhere. What if you could store it with your supplier and not pay for it until you need it?
Smarter Buying Improves Cash Flow
Elasto Proxy can help you to maximize your manufacturing space and improve cash flow at the same time. If you share your sales forecast with us, we can buy in bulk for you. Then, we can store the raw materials and finished products that you need in our warehouses. At a time when many manufacturers are considered about supply chain disruptions, you’ll also appreciate the peace of mind that comes with securing your supply in advance. The benefits don’t end there, either.
When manufacturers buy and receive products in bulk, vendors expect them to pay for everything at the same time and send a large invoice. With Elasto Proxy, we can ship according to your sales forecast and then bill you for only what you’ve received. This enables you to conserve cash while saving manufacturing space at your facility. So, why keep buying more than you need and absorbing hidden costs because of what seems like a good price? The deal that you’re getting might not be such a bargain after all.
Remember, too, that Elasto Proxy can provide you with ready-to-install products as well as raw materials. Instead of buying coils of rubber to fabricate sealing in-house, you can buy finished door and window gaskets that are made at our ISO 9001:2015 facility. Your assemblers won’t have to cut and bond lengths of rubber, which can help you to reduce waste in other ways you may not have considered.
To learn more about the value that Elasto Proxy can add to your operation, contact us.
