Producing goods, storing material and then shipping on demand can be costly and increases the chance of mishandling by suppliers. Avoiding scheduling changes and using better historical data and trending with some reasonable consistency that aids in minimizing supplier interruptions. Another seldom-used tactic is sharing the end users with the supplier so they gain a better understanding of where the material is being utilized. Training each other by using both parties' resources helps both parties grow. Common raw material sourcing.
Idle equipment is a significant hidden cost.
Creative inventory management . Consider having supplier-managed inventory or receiving quantities on a consignment basis for warehousing. Companies operating within the automotive market need to realize cost reductions to remain competitive. There are ways to reduce costs both internally and externally. Companies can go it alone and hope to survive, or they can get creative and look for ways to improve costs both internally and externally by using their suppliers to their advantage.