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Materials management reduces order lead time from 45 to 10 days
Customer challenge
The world’s largest producer of outdoor and athletic wear faced a dilemma when four of its Vietnam-based original equipment manufacturers (OEM) ran short on a key production material, resulting in production and product delays. Material lead times of six weeks, so by the time an OEM thought to order from the raw material supplier, it was often “too little too late.”
Our solution
- Volume price negotiations
- Lead time reduction
- Materials management
- Inventory management
- Ocean transportation
- Reporting
Volume purchase negotiations resulted in over $1 million in annualized savings.
Customer benefits
OIA leveraged long-ranging volume demand from the four OEMs during negotiations with the raw material supplier. Order lead times for the OEM factories were reduced from 45 days to 10 days. The customer saw a notable increase in supply consistency as the OEMs no longer had difficulty reordering in time to meet demand fluctuations. The brand now enjoys enhanced transparency for the cost of its raw materials.