Screws, nuts, bolts, and washers are all C-parts. Though these fasteners are small, low-cost, and often overlooked, they make up a substantial amount of most companies’ inventories. On average, 65%–75% of all parts are C-parts.
Supply Chain Management
What Is C-Parts Management and How Can You Optimize It with TCO?
Learn all you need to know about C-parts management and uncover how you can use the total cost of ownership concept (TCO) to improve your supply chain processes and cut costs.
What Are C-Parts?
C-parts are the fasteners and connecting components that are essential to nearly every kind of manufacturing, from children’s toys through computers to automobiles and everything in between. Billions of fasteners and fastening elements are used around the globe each year.
In the ABC analysis – a common categorization technique used in materials management – A-parts are the highest-value parts, B-parts are intermediate in value, and C-parts are the least valuable. Even though C-parts are low in value, they are ultimately very important for the end product.
What Is C-Parts Management?
The goal of C-parts management is to organize procurement and management of C-parts in a cost-effective way. With poor C-parts management, companies end up spending a disproportionate amount of money and effort dealing with C-parts. When you have a good strategy for managing your C-parts, however, your fastening elements can do exactly what they were meant to do: hold things together without causing hassle and expense.
The Benefits of Good C-Parts Management
Companies that have mastered C-parts management flow smoother throughout their many departments than those that have not. They have streamlined the replenishment process, they don’t experience delivery bottlenecks due to running out of C-parts, and they don’t suffer from the wasted cost that comes with ordering too many parts.
How Do You Improve Your C-Parts Management?
To reduce risk in C-parts management, you must ensure a constant supply of the correct parts and process those parts efficiently. That means ordering the correct amount and storing the appropriate C-parts, having a well-thought-out ordering process, adopting a supply strategy that optimizes costs for all procurement processes, and more.
Automate Your C-Parts Management
One effective way to manage your C-parts is to automate your ordering systems. With our Smart Factory Logistics service, we take care of everything for you.
Learn MoreHow C-Parts Relate to TCO
The TCO concept (total cost of ownership) is a valuable tool to help you assess the real costs of an asset. Applying this method to C-parts management can help you make informed decisions when choosing which processes and areas to improve.
Hidden Costs in C-Parts Management
When it comes to C-parts, most of the costs (aside from the purchasing price) are hidden costs. If you don’t go searching for them, they remain invisible. You can gain moderate to significant savings when you analyze and reduce these invisible costs. Examples include the following:
- The time it takes to order the products
- Delivery
- Unpacking
- Storage
- Moving them from place to place
- Assembly
Using TCO to Uncover Invisible Costs in C-Parts Management
TCO is a great way to identify cost structures and reduce process costs with suitable solutions. When you run a TCO evaluation, you’ll have the necessary information to determine whether the following areas need to be optimized:
- Suppliers
- Order frequency
- Order value
- Method of ordering
- Research and development processes
- Production
- Assembly
- Quality management
- Service
- Admin
- IT
There are obvious costs in each category, but as mentioned above, there are also costs that are harder to see. Within each of these categories, there may be many things to be optimized.
You can get as detailed as you want when breaking down the different process steps. Cost-saving opportunities can be found in surprising places, and every detail has the potential to impact the total cost of ownership of your C-parts.
Examples: How to Improve Issues Uncovered by a TCO Analysis
Let’s look at some examples for potential areas of improvement and suitable solutions:
The Ordering Process
If ordering is where you’re running into issues, then automating your order process with a smart inventory management service like Smart Factory Logistics may be your solution. With SmartBin Cloud, a part of our service, you can automatically order a predefined quantity of new parts as soon as the order point is reached, based on current stock levels. It can be installed on a work cell or at the assembly line. Thus, it eliminates waiting time and goods movement by ordering replacements at the right time and sending them directly to the point of use.
Issues in Assembly
If your TCO analysis shows that assembly is where your company faces issues, a decision as small as switching from a regular screw to a pre-coated screw can make a big impact. A pre-coated screw cuts costs by eliminating the need for lubrication during assembly, which saves time and cuts costs for lubricant and brushes.
These are just a few examples of how an in-depth look at the total cost of ownership can help your company become more efficient.
How to Implement TCO to Optimize Your Supply Chain Management
The above list isn’t a complete rundown of all the areas where your company may have potential to improve. It’s important to look beyond the obvious costs and dig deep to find every opportunity.
There are many company-specific opportunities, which is why a TCO calculation should be tailored specifically to your business. Our experience has shown that unique cost savings can be found in every organization, no matter the size – particularly in the area of C-parts management.
Using a TCO tool, like the one developed by the Institute of Technology Management at the University of St. Gallen, allows you to make TCO calculations that are specific to your company. That way, you can discover hidden costs and make smart, informed decisions on where to improve your C-parts management process.
Need Support in Optimizing Your C-Parts Management?
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Bossard Blog
Read more interesting articles about supply chain management, fastening technology and more in our blog.