Making ‘Unmanageable’ Supply Chains Manageable

We’re using thousands of parts per day, integrated in all devices and machines around us. Whether it’s life-saving medical equipment or machines producing chips for everyday conveniences, these parts are critical to our lives.

For these ‘commodities’ to come to life and in our lives, there’s a world of industries and services providers dedicated to shaping and supporting the supply chain journey of every part and piece. With the machine building industries becoming progressively complex, so do the supply chains. Navigating, simplifying and optimizing the challenges manufacturers face, is what we call ‘integrated supply chain management’.

The Role of Integrated Supply Chain Management

In the world of machine builders – like in virtually any industry – the supply chain is the unsung hero. Orchestrating the journey from raw materials to complex machines that ultimately reach customers. Managing this intricate web – spanning everything from sourcing and inventory to processes – is crucial for a company’s survival. Any hiccup along the way can halt production, so manufacturing companies are laser-focused on fine-tuning every link, using data to juggle costs, quality, speed to keep pace with customer demands, and stay ahead of the competition.

With today’s modern technology being tomorrow’s dime in a dozen, the growing obligations to meet sustainability requirements and legislation and rising costs, fragmented supply chain management is becoming an ever-increasing expensive, unreliable burden. Simply put: supply chains are practically becoming ‘unmanageable’ with a traditional approach.

Enter integrated supply chain management, a strategic approach that actively seeks to optimize the flow of goods and information throughout the entire supply chain. Breaking down silos, improving collaboration, leveraging advanced technologies like data analytics and enhanced automation, this strategy stitches every stage of the supply chain into attuned, synchronized production processes.

Avoiding Risks, Gaining Rewards

With the supply chains not only getting longer and more global, they’re also more challenging to understand and manage. In the first episode of the ‘Tail Supply Conductors’ podcast, MAG45’s Bauke Zeinstra and Dennis Halberstadt, discuss how modern manufacturers can avoid the risks and gain rewards with integrated supply chain management.

“With technology cycle machines are getting more and more complex”, explains Bauke Zeinstra, CEO of MAG45. “The level of technology is much higher than two or three cycles ago. The components – or the parts – these machine builders use are becoming so advanced that even small components are like small machines on their own.”

The Importance of ‘Cheaper’ Tail Parts

As a leading specialist in tail supply for machine builders, MAG45 plays a highly supporting and resourceful role in supply chain management. With thousands of components and thousands of suppliers spread across the globe, the supply chain for tail parts, or so called ‘C-parts’ is a complex web. And while A- and B-parts might garner more attention due to their larger size and higher value, the ‘cheaper’ tail parts are equally indispensable – yet easily overlooked.

“Companies typically focus on the A- and B-parts, because those are the most expensive parts. There’s less focus on C parts – or tail parts as we call them”, Dennis Halberstadt, Manager Project Management at MAG45, sees. “However, these parts are just as vital for assembling a machine. Screws, nuts, even though they’re worth less in the great scheme of things – for our customers those parts are invaluable.”

The Cost of Production Stoppages

As machine builders grapple with the complexities of global supply chains, the demand for integrated solutions is on the rise. With thousands of suppliers and millions of parts to manage, navigating this intricate landscape is a formidable task. Manufacturers of complex machines need comprehensive solutions to streamline their inbound supply chains, from sourcing and procurement, to inventory management and processes.

Searching for a specific part, finding the right supplier, requesting a quote – many companies see valuable production time go to waste because engineers are ‘shopping’ and not ‘engineering’. “That’s where MAG45 comes in”, says Halberstadt. “We take ownership of our customers’ tail supply chain so they can focus on their core business.”

By managing the ‘tail’ with great detail, MAG45 ensures that customers have the necessary components available, facilitating uninterrupted and ultimately preventing costly shutdowns because of supply mishaps. Zeinstra: “A production stop is incredibly expensive. We prevent this by ensuring that stock levels of tail parts are always in order.”

A Comprehensive Approach

Relying on its vast international network of specialized partners and suppliers, MAG45 supports clients in every aspect of tail supply chain management. Zeinstra: “Our integrated solution is servicing the full tail supply chain. We bold together sourcing services, inventory services, and process improvement services to find the most efficient supply chain.” This includes industry specific supply chain activities and necessities, such as cleanroom applications.

Some of the most common industries and applications require cleanrooms – a controlled environment that provides the necessary conditions for producing high-quality parts and machines. “For example, the semiconductor industry demands that every part be delivered clean. Machines are built in cleanrooms, adding complexity to the process. We’ve designed our own cleanroom to assemble kits that support our customers in reducing the workload.”

A kit is one item – with tens of single components within. Known, regular products needed, for instance, for the assembly of a specific machine part. By assembling the kits and providing ‘the full package’, MAG45 further supports customers in reducing their workload.

“We’re a brand-independent service provider, which means we manage tail supply services in a wide range of categories needed by our customers. Whether it’s electrical, mechanical, pneumatical or personal protection equipment – supported by our partners. What makes MAG45 special, is the fact that we offer this as a fully integrated solution.”

Service at the Core

“We don’t just source products for our customers—we also manage inventory and logistics, helping minimize stock levels. We analyze processes to streamline access to components. And we go a step further by placing inventory specialists within our customers’ facilities to manage technical warehouses and ensure stock replenishment,” says Halberstadt.

Consolidated invoicing reduces the workload for the finance department, offering monthly invoices instead of per order. As an integrated supply chain specialist, MAG45 offers a comprehensive range of services to help organizations optimize their operations, reduce costs and enhance customer satisfaction. Simultaneously keeping a close eye on sustainability – and primarily how to further solidify a sustainable approach.

Industries and supply chains are increasingly globalizing. And while having global contact in place with suppliers, MAG45 always looks close to home first. “Whenever there’s a possibility, we like to source items locally, helping in reducing our overall carbon footprint and making this a better world moving forward.” Deeply integrated within organizations, MAG45 works with customers – not for. “It’s about service. We definitely see these relationships as long-term partnerships.”