Eliminate LCD Display Delivery From Your List of Supply Chain Problems
- 1. Eliminate LCD Display Delivery From Your List of Supply Chain Problems
- 2. Your #1 job is to sell and promote your product to the market. If you can't deliver on the commitments… ● You lose opportunity ● You lose the confidence both internally and externally to continue to promote the brand We take a look at one of the more complicated supply chain components, LCD displays, and discuss how to remove this as a cause of missed commitments.
- 3. Why is Delivery a Problem? Missed delivery commitments are one of the most costly and detrimental problems to have as a company. One component missing can: ○ Shut down an entire assembly line ○ Dramatically reduce the operational efficiency of the assembly line ○ Missed revenue ○ Miss customer commitments Components can have long and sometimes variable lead times. As a result, you may experience significant delays in production, wreaking havoc for you and your customers if not managed properly.
- 4. Increase Supplier Capacity Suppliers often spread themselves too thin between their customers which could affect overall production. A healthy capacity range for a supplier is about 70%-85%. This shows that they have enough volume to achieve manufacturing efficiencies. It also means that they will have enough excess capacity to handle process variation and changes in demand. Talk with your supplier about increasing their capacity to ensure that they can effectively manage your needs. The easiest way to increase capacity is to add a third shift.
- 5. ● Is the supplier an expert in your industry or product type? If the supplier is not an expert in your industry or product type, you run the risk of them not understanding what you need well enough. ● This could cause delays in delivery if they run into unexpected obstacles. It also could cause complications once you receive the LCD display if it doesn’t work properly for your product, resulting in re-work delays. ● We recommend to always work with a supplier that is an expert in your specific industry and product type. And it is recommended to switch suppliers if that is not the case in order to avoid the issues associated with this lack of alignment. Supplier Capability Alignment
- 6. ● LCD display lead times are often the longest lead times on your BOM. ● You should maintain a small buffer stock of 2-4 weeks of production. It may be more depending on the actual lead-time and the scarcity of the component. ● The LCD supplier can also proactively carry a similar buffer stock of LCD displays as well. Maintain LCD Display Safety Stock
- 7. Maintain LCD Component Safety Stock Safety stock of the long lead-time LCD display subcomponents can also be stocked as well (this is typically the LCD driver, TFT LCD glass panels, or specialty IC’s). This will reduce overall lead times while minimizing the costs and liabilities compared to stocking the entire LCD display.
- 8. ● Internally, you will want to make sure the suppliers’ lead-times are accurate and accounted for correctly in your MRP system. ● Then, challenge your supplier to reduce their lead times. Identify the longest longest lead time component and start there. Supplier Lead Times
- 9. Supplier Quantities Ideally, your shipping quantities would match you monthly LCD component consumption. Instead of forcing multiple quarters of material, see if your supplier could ship you the exact amount you need monthly.
- 10. Reactively, the LCD supplier should have expediting options. When partnered with the right supplier, they will be able to effectively: Pressure the downstream supply chain to pull in component delivery dates Borrow components from stock or other similar projects Move around internal production schedules Ship partial quantities Expedite the shipping methods Expediting Options
- 11. Expediting Options Can they change shipping options to be delivered quicker? Ocean Shipping by ocean is the most efficient way of shipping, which reduces the overall product costs and results in a lower-cost display. Air Shipping by air is about 3.5 weeks quicker than ocean. You are able to change your shipping method at any time prior to the vessel’s departure so if you need some of your components expedited you could switch them to be transported by air.
- 12. Leveraging all of these strategies eliminates any regular occurrences of LCD delivery issues, and makes you well positioned to handle any upside unplanned demand from your customers. 1. Increase supplier capacity so that they can effectively manage your needs. 2. Only work with suppliers who are an expert in your industry or product. 3. Maintain LCD display safety stock for emergencies. 4. Have your supplier maintain LCD display subcomponent safety stock to reduce costs of storing the entire LCD display. 5. Verify that you are ordering based on accurate supplier lead times. 6. Have your supplier ship quantities that match your monthly consumption. 7. Make sure your supplier has expedite options available to you. Action Items
- 13. Want to learn more? Contact us and let Phoenix Display be your guide!