Small changes can make the difference between a profitable project and a time wasting money drain.  In the Electronic Contract Manufacturing industry, supply chain/ material management can have a greater impact on profitability than almost any other element in the process. 

A few critical aspects, of supply chain management, that can help companies maintain their profit are: demand accuracy, purchasing power, and communication.

Demand Accuracy
How can you plan if you have no idea of what to expect?  You cannot control customer orders and forecasts, but you can mitigate their potentially negative impacts while leveraging the positives.

• Customer Accountability - Keep customers accountable for excess inventory due to demand changes and fluctuating forecasts.  Customers want the best possible price and flexibility.  If you can provide this, good customers will be willing to share in the risk for a greater reward.
  
  
• System Information - Keep system information updated and accurate.  Garbage in = garbage out.  Keep orders, dates, job status, and quantities updated.  Current information and settings will allow your system to keep inventory levels at the optimum level and help you get shipments out on time.
  
  

Purchasing Power
Companies like Foxconn, Flextronics, Sanmina-SCI, and Solectron have tremendous purchasing power which allows them to be more competitive and still profitable.  Small to mid-sized manufacturers may not have the same purchasing power, but they can often increase their leverage with existing orders.

• Combined Orders - Combining demand and delivery based on current and expected demand are crucial.  You may not have Foxconn levels of demand, but that shouldn't stop you from leveraging what you have.
  
  
• Purchase Commitments - Most suppliers are willing to provide better pricing for commitments of larger/more purchases.  Committing to purchase your most expensive/highest volume components from a supplier will often result it better pricing and terms.  Just make sure to be reasonable in your commitments and manage demand and bonded inventory levels closely.
  
  
• Common Manufacturers - You need to build according to customer specifications, but that doesn't mean you can't standardize as much as possible.  Many customers are willing to approve new AVL's if it will save them money, improve delivery, and maintain quality.

Communication
Improved communication between customers, suppliers, and your company can only promote success for all parties.  Everyone in the supply chain wants to succeed, and they succeed as their partners succeed.  Open and improve communication so you can all work together for mutual success.

• MRP Sharing - Giving suppliers visibility of your current and future demand will help them better maintain their inventory levels.  This will help them to be as profitable as possible and ensure the parts you need are ready when needed.  Suppliers should be notified as soon as possible after demand changes in either direction.
  
  
• Customer Updates - Keep customers apprised of your progress.  Let them know what is done and shipping, and what is delaying shipments.  As they see your openness and communication, they will trust you more and rely on your services and expertise.
  
  
• Internal Communication - You should consider your internal processes and departments as part of the supply chain.  Internal departments cannot be islands of information.  Inventory should know immediately if production needs more components.  Purchasing should know when inventory is low or out of stock so they can replenish stock before it impacts production.
  
  

Mastering these areas does not guarantee success, but ignorance or incompetence in these areas nearly guarantees failure.  If you are lacking in any of these areas, start now to correct it.