You can greatly improve the profitability of your company by finding—and fixing—the real problems that are causing your parts shortages.

Why, after all these years, are parts shortages still the No. 1 issue for the assembly manager? Regardless of production volume or product complexity, assembly management spends most of its time working around parts shortages.

So what have manufacturing companies been doing all these years? Some tried automation. Others spent millions of dollars on MRP and ERP systems. Parts shortages didn’t go away. The current fad is outsourcing components to low-cost countries. This not only fails to address parts shortages, it also extends the pipeline and adds even bigger challenges for inventory management and working capital.

Someone once said: “Anyone can build a product when they have all the parts; it takes a lot more ingenuity and creativity to accomplish it without them!” Unfortunately, this type of thinking typically appeals to the macho assembly manager, and people who get rewarded for winning against perilous odds in daily combat. These individuals may grumble about the problems they constantly face, but quite often do not have the facts or the ability to influence anyone who could do anything about it.

Tackling assembly parts shortages offers the business a great opportunity to not only detect problems that plague the assembly managers, but to uncover other issues that are cutting into profit margins. Many problems can contribute to parts shortages, including delinquent receipts, quality problems, misplaced inventory, inaccurate counts, short lead-time changes to a customer order, and engineering changes during or after assembly. The impact of these problems is almost always more obvious to the assembly department than to the business departments from which they emanate.

The root causes of these typical parts

problems seldom fall within the assembly manager’s scope of authority. However, because he or she is often held accountable for shipping product on time, the assembly manager will spend a great deal of time expediting and/or working around the parts shortage problem. This undermines the overall performance of the assembly department.

Fortunately, technology exists in the form of supply chain software that enables organizations to share and communicate information throughout the supply chain. However, for the technology to be helpful, and to gain the most benefit from its use, assembly management must start with a few basic steps:

  • Record the frequency of parts shortages and document their effect on assembly department performance.

  • Find the root causes and prioritize the areas that need to be addressed.

  • Escalate the issues to the appropriate organization and level of management.

  • Instead of just using the list to articulate reasons for shortages, turn it into a business proposition to improve performance and add dollars to the bottom line.

  • Hold frequent status meetings to make sure that root causes are being addressed, and metrics are verifying fewer parts shortages and reduced adverse effects on the assembly line.

  • Address the information and communications needs that allow for better integration between the assembly department and the supporting departments.

These basic steps will position your entire organization to better prepare for—and benefit from—supply chain software that enables superior communication and planning.

Without these basic disciplines in place, chances are you will not see any improvement.

What’s your opinion? Whether you agree or

disagree, Tom Van Tassel will welcome your comments. You can contact him via the Bourton Group’s Web site at www.bourtongroup.com and click on Contact Us.