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Why logistics and procurement teams face inefficiencies in electronics manufacturing
Procuring and managing inventory isn't simple. Parts availability fluctuates, and delays are unpredictable, leading to constant challenges.
Fortunately, your logistics and procurement teams are there to help navigate those difficulties. Their guidance ensures your supply chain can adapt to changes and meet your organization’s needs. However, logistics and procurement teams need to juggle multiple steps, ensuring each one aligns with the previous and following requirements.
Each step requires valuable time and attention to detail. Small errors can easily go unnoticed during initial checks, leading to more complications and delays in the long term. An incorrect order quantity could result in inventory problems that disrupt production schedules and increase costs.
Data collection
From the start of data collection, logistics and procurement teams face time-intensive manual tasks. With pricing data scattered across various suppliers and marketplaces, searching and comparing prices for each component takes hours. This quickly becomes a time-consuming task when products require many different parts at the best price and shortest lead time.
Purchase orders
Creating and submitting purchase orders (POs) is similarly repetitive. Each order requires procurement teams to gather and enter detailed information about specific parts, quantities, and supplier information. Manual data entry may lead to mistakes—such as incorrect part numbers or quantities—that create delays throughout your supply chain or could lead to catastrophic results if a stock-out event occurs when an organization believes all necessary materials are on hand.
Open orders
However, the complexity faced by procurement teams doesn’t stop once the POs are submitted. Managing orders over long delivery timeframes makes tracking and coordinating delivery schedules and shipments more difficult. Parts can arrive piecemeal, requiring procurement teams to manage even more deliveries.
Communication
Communicating with suppliers also adds extra steps to deliveries. Whether it’s keeping records of shipment statuses or navigating fulfillment delays, each change in the delivery schedule only creates more complications for your team. If a critical component is delayed, procurement spends valuable time rescheduling deliveries or finding alternative suppliers.
Inventory
Yet once components arrive, the process doesn't become easier. Logistics teams take over, managing the received inventory and starting a new series of manual tasks. They compare orders and invoices, often across hundreds of lines, to ensure part numbers and quantities match what was defined in the PO.
For high-compliance industries, managing traceability documents is also a critical step that presents its own unique challenges. Standards for necessary documents and data types vary from vendor to vendor, stretching across packing slips, part labels, and digital communications. Capturing data like country of origin and documentation such as certificates of conformity must be gathered and linked to relevant manufactured units to avoid quality issues.
5 tactical tips for improving logistics efficiency
To eliminate these complications and improve the efficiency of your logistics and procurement teams, you need strategies that save time and keep your teams planning ahead. Not only will this speed up your time to market, but it will reduce costs as well.
These five key tactics will help you optimize your supply chain for a lasting competitive edge.
1. Centralize pricing data
By unifying pricing data into a single dashboard, your procurement team can access pricing trends, supplier ratings, and availability for each component. This consolidated view helps your team make informed procurement decisions faster without jumping between multiple sources or platforms. As a result, your products are built and shipped faster.
That’s how Domatic dealt with procurement hurdles during the COVID lockdowns. Like many companies, they experienced difficulties finding the right components for their products, which created an added challenge for pricing. Sellers inflated prices or sold parts that didn’t work as expected, which led to production delays. By adding a single source for procurement data, vendor quality, and material quality, they simplified how they compare manufacturer prices. Now, Domatic negotiates orders in bulk, driving costs down and reducing lead times.
2. Automate purchase orders
Bringing automated tools into the PO process reduces the risk of human errors that create supply chain delays. These technologies eliminate the need for manual data entry by generating accurate part lists based on your product demand. Your procurement team can quickly populate and submit POs with confidence, knowing that the information is free of mistakes.
Salient Motion experienced this issue firsthand. When bottlenecks slowed down procurement, they searched for a solution that could help them purchase parts faster with guaranteed accuracy. Now, they can automatically generate POs based on their real-time inventory and demand. When they need to place an order, they can rest assured that POs are error-free and avoid future supply chain disruptions.
3. Track received inventory
Automated inventory tracking offers real-time visibility into inventory levels and expected shipments, reducing the need for data entry during the receiving process. When shipments arrive, these systems automatically scan each item and compare it against the corresponding PO. This process ensures that the received inventory matches the order's specifications, keeping your teams operating efficiently and error-free.
For example, PatchRx transformed its procurement process with an advanced inventory tracking system. By automating this process, PatchRx significantly reduced the time spent on manual data entry and improved the accuracy of its inventory records. Their team now has data on every inventory-related issue, such as current stock levels and order lead times, making it easier to plan production confidently.
4. Evaluate your pre-NPI process
Assessing pre-NPI workflows helps identify bottlenecks and inefficiencies, allowing your team to adjust to changes and challenges. An iterative approach such as rapid prototyping helps you test and refine new strategies before fully implementing them in a production environment. That way, you get more opportunities to gather feedback and make final adjustments before introducing a new product.
The best logistics solutions offer customizable workflows for cross-team efforts. They enable decision-makers across different focus areas to offer much-needed input before your product goes live. A flexible tool meets your exact needs, fostering more agile communication across the organization.
5. Simplify order management
Your logistics team needs clarity on everything that happens after an order is placed and easy-to-access data to track each step. That starts with finding a system to unify all order details and automate repetitive tasks such as extracting delivery data from emails and PDFs.
For your business, that may mean synchronizing data with existing Enterprise Resource Planning (ERP), Material Requirements Planning (MRP), and Manufacturing Execution System (MES) software. Syncing data across these platforms ensures that inventory information is accurate and actionable across every system.
Cofactr streamlines electronics procurement — to help your organization scale
Cofactr simplifies order management, even as your products and supply chain evolves.
Our all-in-one platform saves time and reduces errors with automated orders and better visibility into product details. With less time spent on tedious procurement tasks, your team can focus on product development and innovation, bringing new products to market faster.
As your organization grows, Cofactr helps you boost production without building your own specialized facilities. Whether you’re ramping up production or diversifying your product offerings, Cofactr provides continuous support, helping you stay agile and competitive amid an evolving supply chain.
Ready to simplify your logistics and procurement processes? Learn more and get started with Cofactr today!