Stockholding essential to meet client demand says castings firm

A WALSALL castings supplier has advised other manufacturing companies that stockholding surplus materials for their clients is essential to ensure they can cope with increased demand in an accurate and efficient manner.
 
Steve Cooper, managing director of Majorfax, said while stockholding was seen by many manufacturers as an expensive and unnecessary overhead, there was growing demand for companies to introduce a stocking structure to provide the most cost effective solutions to their clients, particularly if the client is buying from low cost countries.
 
Despite the obvious cost benefits of lean supply chain philosophies, holding stock can minimise disruptions in the supply chain which are beyond the buyer’s control, he said.
 
Stockholding also ensures continuity of supply, improvements to efficiency and flexibility when faced with sudden surges in demand. If requirements cannot be met, the cost of remedial action could be much higher, added Mr Cooper.
 
“At Majorfax we understand that correct stockholding is an integral part of a company’s materials management solution.  We have actively invested in purpose-built, temperature controlled warehousing facilities to meet these exacting standards,” he said.
 
“It is important that manufacturing companies take an active interest in ensuring that the continued supply of products for their clients is cost effectively maintained.
 
“This includes minimising risks in the supply chain by careful supplier selection, using knowledge and experience of managing global supply chains to anticipate potential disruptions and working together with clients to formulate the best combination of forecasting, stock levels, delivery and contingency to avoid damaging ‘stock-out’ situations.”
 
Traditionally clients have been concerned about stockholding as they think their money will be tied up and could have been put to better use elsewhere, added Mr Cooper. However, he said suppliers could cover the cost of the initial financial outlay, which could help their customers with any initial budgeting and cash flow issues.
 
Surplus stock could then be held at the supplier’s warehouse until it is needed, meaning the client avoids expensive storage, insurance and security costs, allowing the manufacturer to benefit from line-side deliveries.
 
“By investing in warehousing facilities, we are now able to offer customers the best possible storage solutions for their bulk materials, in a safe controlled environment,” said Mr Cooper.
 
“At Majorfax, we’ve also taken on the role of managing the supply chain for our clients across the construction, domestic heating, power generation and bulk handling industries by incorporating their lead times into our materials management plan.”