Manufacturing a single aircraft takes tons of raw materials ranging from countless metal variations, injected molded plastics to fasteners, resins, and electronic components. Procuring raw materials and sourcing the countless parts can be a difficult task for an OEM [Original Equipment Manufacturer] associated with the aerospace sector. Such an issue is not just experienced in the aerospace landscape, but even other sectors like automotive, oil & gas, industrial, etc. In this post, let’s understand how to procure the raw materials on-demand promptly.

Bisley Company can help the OEMs in getting specialized chemicals and quality raw materials to end-users. Bisley Group has been committedly serving extensive sectors like aluminum, ceramics & refractories, agrichemicals, welding, plastics, water treatment, construction materials, and steel for more than 65 years.

Best raw materials procurement practices to follow

Share material demand profile

Sharing of material demand summary with the raw material sources will reduce the trouble for procuring raw materials from them. They will start operating more instinctively and make sure that raw material is available. In this way, the OEM can control the pricing.

Share a forecast with specifications of the material type, size, volume, etc. With this knowledge in advance, the distributor can keep appropriate inventory stocked at their service centers. It reduces the wastage of time by up to 50% for OEMs.

Shared material forecast needs to be detailed

Many factors will affect the material prices like –

  • Forecast accuracy
  • Limitations of material
  • Unique packaging needs
  • Processing needs
  • Specific quantities across a specific time frame along with unique sizes and stipulations

Such information is useful to the distributor as it facilitates them to serve customers efficiently. They level their load production and manage inventory levels in a better way.

Establish ‘right to buy’ or ‘direct-buy’ contracts

OEM has to establish a standard raw material purchase contract with the distributors. Transparency is crucial to ensure that contract conditions get followed. Alternatively, if the raw material supplier is unable to fulfill the orders OEM is made aware of the delays in advance and gets prepared to address the possible postponements properly. The OEM can switch distributors in case the promised service level does not get delivered.

Enforce agreed to purchase behavior

If the OEMs fail to buy the forecasted raw materials from distributors according to the contract, their service center will be left with excessive inventory. Therefore, it is crucial that OEM stringently monitor and enforce the agreed terms.

Keep material bills updated

The parts don’t get manufactured the same way therefore no two material bills are the same. Therefore, the OEM needs to find an easy way for the contract-manufacturers to update the material bills.

The minute OEM outsources specific part visibility of its purchased size and form gets lost. Therefore, have a systematic way planned to accommodate supply chain changes like new part introduction or transition of parts or modification to existing parts.

OEMs forecast its raw material needs and handle the timely procurement and supply with ease. It allows them to get better contract terms and pricing. Guesswork for raw materials demand in the future gets eliminated by sharing material details with the contract manufacturers. Incorporating the best raw material procurement practices OEMs can enhance the efficiency of the overall supply chain.

 

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