Supply chain management covers the regulation of all activities related to the supply chain process and is not limited to the mere purchase of material. Activities in the supply chain include both the sourcing of raw materials and the supervision of various logistics processes in the supply chain. The overriding goal of supply chain management is to provide its customers with high-quality products with high value while maintaining a competitive advantage. Therefore, it is vital to optimize your supply chain management by choosing the right EMS provider.

The entire supply chain management process includes the purchase of materials and demand planning and quick response to changes in demand, management of inventory and excess materials, control of delivered materials, audits of suppliers, compliance with applicable law, and caring for the environment. Moreover, the need to adequately respond to crises such as epidemics, conflicts, or natural disasters is emphasized more than ever. Therefore, there is no doubt that effective supply chain optimization is possible if you cooperate with an EMS with extensive experience in this field.

Skilled suppliers are a source of certainty and savings

The contracting organization which outsources the production to a contracted company can submit the material to EMS (contract material) itself or delegate the supply chain management to EMS. Establishing and establishing relationships with a large supplier should be one of the primary goals of supply chain management. Choosing a partner, OEMs should consider much more than supplier rates. Rather than sourcing the cheapest supplier available, companies should choose a reliable, ethical supplier that adheres to high-quality standards. Then they have contracting companies sure that they delegate this responsible task to an experienced entity that, due to many orders, has established relationships with suppliers, verifies them correctly, and regularly carries out professional audits on the quality and prices of materials.

Of course, OEMs can manage the entire supply chain themselves, but this comes at a high cost. Taking care of quality, quantity, packaging, and timely deliveries, controlling materials and their proper storage is challenging and time-consuming and generates costs, and requires the employment of specialists and investments in advanced ERP systems.

Supplier evaluation and material quality verification

OEMs should verify how the contract acceptor evaluates its suppliers. Of course, supply chain leaders know the way to faster and cheaper supply chains, but it’s required that they still should grow in supplier engagement and auditing. For example, despite many years of cooperation with suppliers, a professional EMS supplier should thoroughly control each shipment received. Thanks to this, if non-conformities are identified, they can send an NCR report to the supplier and wait for 8D information. Corrections introduced by suppliers based on 8D reports, along with the timeliness of deliveries and the quality of materials, should be an essential criterion for assessing suppliers to ensure the highest quality of the final product and the production process.

Relevant systems and intelligent supply chain management

Effective supply chain management requires constant innovation. The supply chain comprises manufacturers, suppliers, distributors, and customers, and your supply chain strategy should cover everything from raw material procurement to an established return protocol. The entity coordinating the implementation of this complex process is supported by ERP (Enterprise Resource Planning) systems and intelligent solutions. The ERP system allows you to plan and monitor various aspects of the supply chain. In turn, smart solutions include integrating these systems with other tools, for example, ERP (Microsoft Dynamics AX) integration with the MRP2 active material planning function.

The use of such solutions by a company managing the supply chain makes it able to track and manage materials, monitor the production process, and minimize the amount of unused excess material, which reduces the financial responsibility of its principals. What’s more, intelligent tools allow EMS to monitor numerous data on an ongoing basis and react to problems sufficiently in advance or quickly make corrections in orders.

Compliance with laws and represented values

Responsible supply chain management cannot exist without knowledge of and compliance with the law. Therefore, a reliable EMS service provider should follow the regulations and know the latest rules to apply the proper procedures. It is also essential that before placing an order for materials, check the BOM list of the OEM manufacturer for compliance with applicable law.

When choosing an EMS provider, the company’s ethical responsibility is also essential. It is worth paying attention to whether the EMS cares about adequate remuneration of employees, and in particular, whether it does not employ children or does not use slave labor. The client can verify this by collecting information on whether EMS complies with legal regulations and the principles set out in the anti-corruption policy, internal ethical conduct policy, and whether it applies a CSR (Corporate Social Responsibility) strategy according to the ISO 26000 requirements. In turn, in terms of ecological responsibility, it is worth ensuring whether the entity responsible for managing the supply chain cares about minimizing the amount of waste. That is a responsible attitude and has a significant impact on optimizing the entire supply chain management process. Reliable suppliers have a Lean approach to reducing waste and use automated management of building systems to reduce energy consumption.

Give control of the supply chain to your EMS provider

If you have already undertaken activities related to supply chain management, you certainly know how difficult it is to develop, maintain and optimize a stable and legal supply chain. It is necessary to have the appropriate skills, experience, and involvement of many resources. For this reason, it is worth considering outsourcing your entire supply chain management to a contractual EMS service provider. Thanks to this, you will be sure not only of timely deliveries but also a guarantee that the materials will be of high quality. In addition, you will avoid costs related to handling deliveries and storage of materials. At the same time, transferring control of the supply chain to an external entity will allow you to focus on your business development, design, and sales.