Guidance for manufacturing companies engaging outside support
Inquire About Procurement ManagementExplore Use Cases and Outcomes
Material shortages despite high inventory levels, or limited warehouse and buffer space, may be reasons to reconsider your procurement logistics.
Whether you handle the work internally or bring in consultants depends on the stage of your project and the expertise and capacity available within your organization. The key question is whether you first need to clarify causes and objectives, develop a material supply concept, or prepare for implementation. Our project experience shows that outside support can be particularly valuable when cause-and-effect relationships are unclear, a structured approach is needed, or changes must be coordinated across several departments.
When choosing a consulting partner, consider which areas of expertise they can bring together and what results you need to make a decision. A comprehensive, end-to-end view of material flows and their interdependencies is just as important as combining supply chain expertise with experience in day-to-day factory operations, especially when inventory, material supply, and space planning are closely connected.
Metroplan’s procurement consulting for manufacturing companies combines supply chain management expertise with practical experience in factory processes and material flows. Supply chain consulting, operational excellence, and factory planning work together to assess how procurement decisions affect factory operations.
We consider procurement logistics from the supplier through goods receipt in connection with inspection, storage, and supply to production. This makes it possible to use procurement logistics as a lever for improvement across the entire factory. We also take account of how information is passed between departments and where responsibilities lie. This allows inventory and delivery requirements to be aligned with the factory’s physical layout and organizational structures.
For a new factory, these requirements are incorporated early in layout planning and facility sizing. In existing factories, we work within the structures already in place and plan implementation around ongoing operations.
The following use cases show how our procurement consulting can affect space requirements and capital tied up in inventory. They draw on a specific factory project and our approach to inventory optimization.
Use Case 1
A factory project called for an expansion. By optimizing procurement logistics, we reduced the space required for logistics and increased the area available for assembly. The planned first phase of expansion was no longer needed. We assess the financial benefit by comparing the avoided expansion investment with the costs of remodeling and changing operations.
Use Case 2
When inventory levels are high, we assess which materials are stocked beyond actual requirements. Demand-based inventory coverage targets and adjusted delivery quantities make it possible to reduce excess stock while retaining the buffers needed to safeguard supply. This frees up capital and improves cash flow. We assess the capital released separately from ongoing cost savings, which may also improve EBIT.
A material supply concept should clearly explain which procurement model is appropriate for each type of material. To optimize inventory, Metroplan considers consumption, replenishment lead times, delivery capability, and how critical each material is to production. An ABC/XYZ analysis and an assessment of supplier risks help us categorize the materials. From there, we determine suitable procurement models and inventory coverage targets aligned with demand.
The overview shows the conditions under which each approach may be appropriate. Different approaches can be combined for different material groups.
Individual purchase orders cover specific requirements.
Where demand is sufficiently predictable and delivery processes are stable, just-in-time delivery or delivery in production sequence, known as just-in-sequence, may be suitable.
Kanban systems or reorder points trigger replenishment.
This requires suitable consumption patterns, reliable replenishment lead times, and appropriate container or order quantities.
The supplier manages replenishment within agreed limits.
The supplier needs reliable inventory and consumption data, along with clearly defined responsibilities.
Buffers may be necessary for critical materials or when supply is volatile.
Buffer levels are based on demand, replenishment lead times, and supply risk, and are reviewed regularly.
Several factors matter when comparing consulting proposals. One is the proposed methodology and whether it considers procurement logistics as a whole. The proposal should show how causes and interdependencies will be analyzed, how procurement processes, material supply, and factory requirements will be considered together, and how actionable measures will be developed. Another factor is how the proposed measures will be evaluated financially. Their expected benefits should be assessed alongside the required investment and the effort involved in making the changes.
A sound proposal also specifies the planned analyses and deliverables, the assumptions on which they are based, and who will be responsible through implementation. This helps you determine which services can be provided internally and where additional support is needed.
The following questions help define the services required and assign responsibilities.
Which tasks can your teams handle independently with the available data, methods, expertise, and staffing capacity?
Which analyses and planning deliverables are needed to clarify cause-and-effect relationships, assess interactions across the supply chain alongside factory requirements, and develop integrated solutions?
Would it make sense to transfer operational tasks to a service provider? If so, what requirements for supply, interfaces, and management would need to be agreed upon?
What system changes follow from the proposed approach, and how will they be coordinated with the relevant departments?
Which technical solutions are needed to improve storage, material flow, and the supply of materials to production? How can they be integrated into existing processes and facilities?
The Quick Check helps you determine the scope of further consulting and planning. Together with procurement, logistics, and production, we assess the current situation across eight areas. You receive a structured assessment and prioritized measures to help define responsibilities and next steps.
You can find the eight areas and our approach, from analysis through implementation, here: Procurement Management for Manufacturing Companies
What project experience matters when choosing a consulting partner?
Look for projects involving comparable requirements for material supply, inventory, and factory structures. Documented project results should show what changes were planned, how their financial impact was assessed, and which implementation tasks the consulting team handled.
Should procurement logistics and factory planning be contracted together?
What matters is coordinated planning of delivery quantities, inventory targets, delivery intervals, and the resulting factory requirements. Awarding both areas of work together can support that coordination. If they are contracted separately, data handovers, interfaces, and responsibilities among those involved must be clearly defined.
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