PROJECT

A distributor required a stock program covering standard fasteners and custom accessories for multiple projects.

Strategy 1: Implement Differentiated Classification Management (ABC Analysis Method)

 Method: Classify and sort fasteners based on annual consumption value:

 A items (account for 70-80% of the amount, 10-20% of the varieties): such as high-value, critical non-standard parts or high-strength bolts. Management focus: accurate forecasting, strict monitoring, low inventory, high-frequency ordering. VMI or JIT can be used.

 B items (account for 15-20% of the amount, 20-30% of the varieties): medium-value standard parts. Management focus: routine monitoring, using fixed-quantity or periodic ordering models.

 C items (account for 5-10% of the amount, 60-70% of the varieties): low-value standard parts, such as ordinary screws and washers. Management focus: simplified management, can set higher safety stock, adopt two-bin method or bulk purchasing to reduce management effort. Benefit: concentrate limited management resources on the most important materials.

Strategy 2: Scientifically Set Safety Stock and Ordering Parameters

 Safety Stock Calculation: Its core is to cope with demand uncertainty and supply uncertainty. In practice, it can be coordinated with suppliers (such as Shisheng Metal) to jointly set reasonable safety stock levels based on historical delivery data and demand fluctuations.

 Economic Order Quantity (EOQ) Model: Balance ordering costs and holding costs to find the order quantity that minimizes total cost. Suitable for stable and independent B/C class materials.

Strategy 3: Promote Supply Chain Collaboration and Model Innovation

 Vendor-Managed Inventory (VMI): Managed by the supplier (such as Shisheng Metal), who independently manages certain material inventory in the customer's warehouse based on shared inventory data and demand forecasts, with the customer settling according to actual consumption. This significantly reduces the customer's inventory levels and management burden while improving the supplier's delivery efficiency and planning.

 Just-in-Time (JIT) Delivery: Agree on precise delivery time windows with suppliers and deliver directly to the production line, achieving near "zero inventory."

 Consignment Inventory: Materials are stored at the customer site, and ownership transfer and payment only occur upon usage.

Strategy 4: Leverage Informatization and Data-Driven Decision Making

 ERP/MRP Systems: Serve as the basis for executing inventory plans, ensuring unified and real-time data on demand, inventory, in-transit, and plans.

 Inventory Analysis Dashboards: Monitor key indicators such as inventory turnover, slow-moving material ratio, and service levels to drive continuous improvement.

 Demand Forecasting Tools: Use historical data and statistical models to improve forecast accuracy.

Strategy 5: Regularly Clear and Prevent Obsolete Inventory

 Establish Obsolete Material Handling Process: Periodically (e.g., quarterly) identify and dispose of obsolete inventory (substitution, return to supplier, sale, scrap).

 Strengthen Engineering Change Notice (ECN) Management: Any design changes must evaluate the impact on existing inventory and develop clear switching or consumption plans.

 Implement Standardization: Reducing material varieties from the source is the most effective way to prevent obsolescence.

How Qiansheng Metal Products Co., Ltd. Helps Customers Optimize Inventory

Qiansheng Metal is not only a provider of product manufacturing but also a solution partner for customer inventory optimization:

Providing flexible delivery solutions: Supports small-batch, multi-batch, and just-in-time deliveries.

Implementing VMI services: We have successfully implemented VMI for multiple core customers, helping them reduce related material inventory by an average of 30%-50%.

Sharing data and forecasts: Establishing data connectivity with customers to improve transparency and coordination in planning for both parties.

Assisting with slow-moving items: For standard parts that become slow-moving inventory due to design changes or other reasons, we can help assess and try to reallocate them within the customer’s group or to other clients.

Conclusion

Inventory optimization for fasteners and accessories is a lean journey that requires the joint support of technology, data, and partnerships. It does not have a one-time ultimate endpoint, only a cycle of continuous improvement. Its highest achievement is realizing deep collaboration across the supply chain so that materials, like a symphony under precise direction, flow to the required place, in the required quantity, at the required time. Qiansheng Metal Products Co., Ltd., Yongnian District, Handan City, is committed to leveraging its professional supply chain service capabilities to work with customers to compose this harmonious chapter of efficiency and cost balance, transforming inventory from a 'necessary evil' into 'flowing value.'