Prime Advantage Blog

Sustainable Business Practices For Lasting Success in Manufacturing

Thyra Nelson on Apr 30, 2015 7:50:00 AM

When people hear the phrase "sustainable business practices," most immediately think of recycling or using recycled materials. Although recycling is a common practice for many, most manufacturers are thinking far beyond this first step. During the benchmarking sessions at Prime Advantage's recent Spring Conference, a collection of Members and Endorsed Suppliers discussed their business activities related to sustainability. Yes, recycling was on the list, but it wasn’t the focus of the conversation.

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Prime Advantage Members are primarily mid-sized manufacturers with some located in smaller communities. Many times their company is a primary employer for the area. For these Members, sustainability means making sure the business remains intact for future generations. This includes thoughtful succession planning to make sure the business continues. Many smaller companies are the idea and dream of one person, so taking it beyond the initial vision is sometimes a difficult undertaking. The great innovators that founded these companies now have to become the insightful leaders who create a forward-looking vision that will continue the business and its success beyond their tenure.

Ensuring frontward-sight for the company involves educating employees to treat the business as their own. Proper planning and thoughtful execution can result in huge savings. Whether it's purchasing the right amount of raw materials to eliminate storage and waste, or finding a way to plan ahead to avoid production delays and expedited shipping; responses to these types of situations result in significant costs. Many Members and Endorsed Suppliers discussed simple solutions that they have deliberated in their organizations, but most agreed it takes the entire team thinking about overall sustainability to make the effort successful.

Packaging was another hot topic at the sustainability benchmarking session. The discussion focused on finding the balance between too much packaging (which costs the customer time to remove and money to dispose of) and too little packaging (which can result in damage to the components during transportation). Proactive Endorsed Suppliers are actively working with customers to find a system that works for their process, while ensuring safe and defect-free delivery. Many indicated that significant savings can add up quickly through decreased production time and lower waste removal charges.

Conversations continued around grouping parts and creating kits whenever possible to bring customers greater time-savings in their production process. Many Members vented about the amount of man-hours to find and group parts that were received from the same supplier. After simple customer-supplier conversations, a discovery was made that similar parts could be split up and packed together for products being produced simultaneously by suppliers.  By knowing how the customer uses the parts, the supplier can package the whole assembly in one bundle without any time added in the process. This allows the customer to deliver the assembly directly to the production line without spending time picking and grouping the parts in the warehouse.

Many companies are increasing their productivity through simple time-saving approaches. Regular communication through strong Member and Endorsed Supplier relationships is the key to finding solutions throughout the supply chain. The end result is increased profitability without raising prices to the end-user. And an increasingly profitable company is a sustainable company.2015-cfo-survey-report

Topics: Sustainability and Sustainable Business Practices

Thyra Nelson

Posted by Thyra Nelson

Thyra is the Marketing Manager for Prime Advantage, a Chicago based Group Purchasing Organization for mid-market manufacturers. She works with the group’s Endorsed Suppliers to share products and services with Members.

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