Keep Inventory Low With 48-Hour Supplier Delivery
Partner with suppliers who deliver within about 48 hours so you hold less stock and free up cash.
- Creator
TheAMEConnect- Improvement date
- June 16, 2024
- Company
Southwest Steel Buildings- Wastes
Holding large amounts of raw material ties up cash, fills space, and hides quality or demand problems inside a big buffer of stock.
The team keeps inventory levels low and relies on suppliers that can deliver needed material within roughly 48 hours, so replenishment happens fast instead of sitting on shelves.
Low inventory plus fast, reliable replenishment beats large buffers.
What is a Keep Inventory Low With 48-Hour Supplier Delivery?
This is a supplier-driven low-inventory strategy. Instead of stockpiling material to protect against shortages, the company deliberately holds low quantities and depends on suppliers who can deliver within about 48 hours when stock runs down.
Managing inventory turns is the measure behind it. Turns describe how many times you sell through and replace stock in a period. Higher turns mean less cash frozen in material and fewer items aging in storage.
The enabler is the supplier relationship. Short, dependable lead times let the team burn through what they hold and re-order confidently, rather than carrying weeks of safety stock as insurance.
Why it works
Low inventory with fast replenishment makes problems visible and keeps proven supplier arrangements doing the work of a warehouse.
- Cash is freed instead of sitting frozen in shelves of material.
- Small buffers expose demand and quality issues quickly instead of hiding them.
- A reliable 48-hour supplier becomes a reusable capability the whole team can count on.
- Higher inventory turns give a clear, repeatable metric to manage against.
How to create this idea
- 1Measure current inventory turns
Track how often each material is consumed and replaced so you know your baseline.
- 2Identify fast, reliable suppliers
Find or negotiate suppliers who can deliver needed material within about 48 hours.
- 3Lower stock levels deliberately
Reduce on-hand quantities to what you can burn through before the next delivery arrives.
- 4Set clear reorder triggers
Define minimum levels that signal a re-order in time for the 48-hour window.
- 5Monitor and adjust
Watch turns and stockouts, then tune levels and supplier terms as demand shifts.
Best used when
- reliable suppliers
- short lead times
- high carrying cost
- stable demand
Less useful when
- long supplier lead times
- unreliable delivery
- highly volatile demand
- single-source risk
Tags
- Problem
- excess inventorytied-up cashwaiting
- Lean methods
- JITinventory turnssupplier partnership
- Application
- procurementmaterials management
Captured from TheAMEConnect at Southwest Steel Buildings in the video "AME 2 Second Lean Tour: Southwest Steel Buildings", at 00:38:31. On Lean Toolbox. Watch the original video on YouTube ↗
