Don’t be beholden to materials you’ve always
used if there is scarcity. Look for more readily available alternate materials that solve the same problem.
Joe Antonacci
CFO, Filtration Group Life Sciences
Optimize Your Supply Chain
Porex is the developer and manufacturer of porous plastics, sintered PTFE, porous polymer fiber, porous polypropylene, and porous membranes.
$1 Million
They achieved $1M in supply chain savings within six months.
For more information on this story, contact
Joe Antonacci, CFO, Filtration Group Life Sciences: [email protected]
Goal
Porex was primarily a made-to-order business due to the highly customized nature of the parts it produced. As a high-mix business with thousands of unique customers and SKUs, the company’s complex supply chain made it difficult to maintain competitive lead times at an acceptable on-time delivery performance. As a result, its teams frequently had to intervene to meet customer needs quickly. Despite the efforts to sustain performance, it came as an unacceptable cost to the team, so Porex committed to solving the problem.
Process
Starting in 2021, lead times on critical materials for its 80s customers had increased substantially, along with costs and risks of disruption. Due to the number of customers impacted by a material, Porex had historically struggled to maintain material requalification. But in the environment that arose during 2021, requalification was critical to continuing supply.
To address this, first Porex identified and qualified alternative raw materials as risk mitigation to cover capacity shortages it had experienced with its largest spend supplier. It started with the most critical items that generated the largest revenue, identified the material gap against all customer forecasts, and created a sourcing matrix for confirming acceptable alternative raw materials. Then it put together a cross-functional team to help segments navigate customers and quickly switch out materials as needed.
Secondly, they focused on procurement. Porex Fairburn and Richmond had approximately 5,800 unique transactions under the MRO category annually. Fastenal, Office Depot, Amazon Business, and McMaster-Carr Supply Company accounted for 60% of all PO transactions for this category. Funneling this many POs through the team was countercultural. Porex required its entrepreneurs to go through the purchasing team to order a $10 item from an approved vendor. The company was not empowering them to act. So, Porex created an e-procurement model, enabling teams to place their own orders online within established approval limits. This was a huge win, freeing up teams to spend more time on value-add activities.
Results
Porex converted 45 customer items in Fairburn, Bautzen, and Malaysia in a very short time, increasing material margins and savings due to less expensive materials. Within six months, it achieved more than $1M in supply chain savings, reduced PO issuance by 60%, and increased on-time delivery to its customers. Most importantly, Porex created an environment that supports its culture and team.
Key Learnings
- Don’t be beholden to materials you’ve always used if there is scarcity. Look for more readily available alternate materials that solve the same problem.
- Don’t be afraid to democratize the process (procurement for small purchases in this case).