Supply Dynamics (SDX) released an article with a thought-provoking beginning. It said, “Discover how Supply Dynamics helped a Fortune 200 Aerospace OEM use SDX to transform how they manage their supply chain and how they utilized material demand aggregation to achieve:
- 25% cost reduction on raw materials
- $45 million in projected savings over 5 years
- Improved management of over 700 sub-tier suppliers”
Those results are enough to stop any savvy business person in their tracks. If material demand aggregation (MDA) produced those numbers, it’s wise to dive further into what MDA is all about. The essence of MDA is an exercise in sourcing optimization for “who buys what materials, in what quantities, when, and at what prices.” The benefits of aggregating (pulling together) order requirements makes good economic sense, especially when you consider the associated buying-power throughout a supply chain.
Small Manufacturers Find Big Savings
There are companies like Auto-Valve, Inc. that are known for proactively working with their customers to promote the value of MDA. Companies like AVI evaluate, identify, and share with their customers money-saving strategies and moves. There’s a lot to be said for smaller manufacturers who are able to invest the time and resources to ensure their customers operate at the highest financial efficiency possible.
In September 2019, Air Force Magazine reported that “Aerospace accounted for $374 billion of US gross domestic product, or 1.8 percent of overall GDP.” The Aerospace Industries Association’s 2020 Facts & Figures U.S. Aerospace & Defense shared the following 2019 statistics about aerospace: 2.19 million workers, $909 billion in total industry sales revenue, and $148 billion in exports. The bottom line is that aerospace and defense is an industry that affects many people and where dollars multiply quickly, so it’s paramount that those dollars are truly producing the biggest bang for your buck.
Choosing to work with a company that’s capable of analyzing their customers’ buying habits against their actual needs is a financially prudent business move and an incredible investment in longevity.
Author: Evelyn Lindell