This is necessary, because contract manufacturers either take up consignment manufacturing or turnkey manufacturing. In the first model, your organization is expected to provision the outsourced manufacturer with all the raw material needed for production, and your manufacturing partner delivers the finished products. Whereas in the turnkey model, your outsourced manufacturer takes on all aspects of production from procuring all the inputs to delivering the finished goods and sometimes even ensuring quality checks.

However, in both these models, it’s very critical that contract manufacturers access inventory management dashboards in the cloud to ensure process efficiency. If contract manufacturers are working under the https://visualmodo.com/turnkey model, then your organization must know when the inventory has run out and if there will be production delays due to this, as this can snowball into disrupting your supply chain cycle.

Cloud: Enabling Link between Contract Manufacturers and Inventory Management

While most organizations may have their Material Requirement Planning systems in place, they may not be able to preempt requirements at a granular level for the contract manufacturers. Facilitating data accessibility through the cloud can help both parties, and cycle counting for inventories also becomes simpler for your numerous contract manufacturers, especially if they are across the globe and in different time zones.

Another reason to link your contract manufacturing software to your inventory data in the cloud is to ensure a smooth supply chain process. Supply chain planners are tasked with knowing if the contract manufacturers will deliver the products in time. Linking your inventory data in the cloud highlights the gaps therein making forecasting easier, while also helping the function support the Materials Planning department to provide raw material in time. It also helps them to understand the inventory procurement challenges of smaller supply chain units catering to the primary warehouse.