Inventory, Lead Times, Just-in-Time Shipping and More
Allied Plastics understands the role it plays in helping customers bring finished products to market as efficiently and cost-effectively as possible. That is why the company has made significant investments far beyond its production floor.
In addition to its 200,000-square-foot manufacturing facility, Allied Plastics operates a 46,000-square-foot distribution center just a few miles away. The warehouse and adjoining acre of land are dedicated to the secure storage of customer inventory. This allows Allied Plastics to provide customized logistics solutions that help OEMs secure the plastic parts they need — precisely when they need them.
OEMs benefit from Allied Plastics’ logistics solutions in several ways:
- Reduced inventory demands
- Shortened lead times
- Reduced freight costs
- Peace of mind
Customized stocking programs allow just-in-time management
With a customized stocking program from Allied Plastics, an OEM commits to a certain amount of product over a specified period of time. Allied Plastics then develops a schedule to produce that product incrementally, storing the product in its warehouse until the customer needs it.
In most instances, the customer arranges to pick up its needed product on a predefined schedule. Drop-shipping is also available upon request. Everything is tailored to a given OEM’s needs.
Regardless of which fulfillment approach is chosen, a customized stocking program helps identify an OEM’s longer-term product needs. Allied Plastics then ensures that the right amount of product is available at the right times.
“A customer typically knows what the EAU (estimated annual usage) is for whatever product we are producing for them,” says Steve Wieder, co-owner of Allied Plastics. “We then work with the customer to determine what the appropriate min/max levels should be.”
For instance, it may be decided that inventory should never climb above 800 units, but should never fall below 100, either. This helps ensure that neither Allied Plastics nor its customer will ever be caught without the necessary inventory to meet demand. This also ensures that excessive inventory will never accumulate in storage, which helps reduce waste and cost.
In most instances, a given stocking program’s min/max levels hold steady throughout the year. However, Allied Plastics continually monitors each stocking program to see if min/max levels need to be adjusted due to seasonality or changes in demand.
Secure the necessary raw materials
Customized stocking programs are available for not only finished parts, but also raw materials (i.e. plastic sheeting).
Allied Plastics determines how many parts can be produced from a single sheet of plastic. Thus, by committing to a certain number of sheets, an OEM can accurately predict the quantity of parts it can have made within a certain timeframe. Furthermore, the OEM’s lead time is sliced in half because Allied Plastics will always have the necessary amount of raw material in stock.
This is an ideal approach for an OEM that would prefer to have raw material stored in a warehouse, as opposed to finished product.
Predictability improves production
Customized stocking programs bring predictability to the production scheduling process. Predictability brings efficiency, and efficiency brings enhanced reliability and quality.
Because it is able to see longer-term production needs, Allied Plastics can adjust production schedules to take advantage of slower times while avoiding congestion during busier times. This provides another layer of certainty with respect to product availability.
For instance, if 500 units are scheduled to be produced in three weeks, that production run could be moved up a week if the factory has extra capacity at that time. Or, if the factory is going to be unusually busy for the next month, 200 units could be produced one week and 300 the next. Whatever the case, the OEM can be confident that it will have the needed inventory when it needs it.
10-plus years of experience in customized logistics
Allied Plastics is well-suited to help OEMs adhere to a just-in-time approach to production and inventory management.
Along with its huge distribution center, another advantage Allied Plastics has is EDI capability. EDI, electronic data interchange, allows Allied Plastics to directly import customer orders into its business management system. This helps speed up business cycles while reducing human errors that are inherent in manual data entry and paper trails.
Allied Plastics has been providing customized logistics solutions since 2010. The company’s commitment has been largely driven by an increasing amount of business from OEMs.
“When our customer is manufacturing a $300,000 tractor, it is crucial that we provide our plastic part in the right quantity and at the right time,” says Jon Larson, OEM sales manager at Allied Plastics. “A customized stocking program helps us do that much more efficiently.”
In addition to agriculture, Allied Plastics manages customized stocking programs for OEMs in other industries including construction, lawn and garden, transportation and recreation. Virtually any OEM that needs a steady supply of plastic parts is an ideal candidate for a customized stocking program.
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