In 2021 I was running supply chain for a semiconductor company. A new 12-inch fab was ramping and waiting on equipment; semiconductor tool prices were going through the roof and lead times had stretched from six months to fourteen. Every day the line stood still was money. The phone would not stop — and yet there was still a pile of obsolete material sitting in the warehouse that should have been cleared out long before.
That was the moment I understood: a supply chain problem is never only in one link.
Let me introduce myself. I am 竤泉. Twenty-four years in manufacturing supply chain. I started as a purchasing clerk at Toshiba — notebook computers, yachts, wind-power converters, semiconductor fabs — and worked my way up to vice president of supply chain. Purchasing, planning, warehousing, supplier management: I have been through the whole line.
Never mind the titles. Let me talk about the mistakes. My most expensive one came when I was running purchasing for a wind-power business. Rare-earth magnets were being driven up by policy controls and the like; afraid of a cut-off, I chased the high and locked in a large position. Six months later the price was cut in half, and the write-down on that material hurt for years. What that tuition bought me was deeper than any training course: the thing a buyer should fear most is not paying too much — it is making the decision inside a panic.
Why start writing now? Over the years I have helped several factories around me look at their problems, and I kept finding the same thing: small and mid-sized manufacturers do not lack effort. They lack methods and tools. The boss is fighting fires every day, and nobody tells him where the fire comes from. And what the market offers on supply chain is either academic concepts flying everywhere, or the practices of big foreign-owned plants that a mid-sized factory simply cannot use.
So this column is about three things only:
- How to bring inventory down — cash sitting in a warehouse is the quietest way a factory bleeds;
- How to protect delivery — how to keep from missing the date you promised a customer;
- How to manage suppliers — do not hand your lifeline to people who are not reliable.
Every piece ends with a method, a template or a tool you can take away and use — no correct nonsense.
For the first one, here is a small tool you can use right now. Take three minutes and check yourself on three questions:
1. In your warehouse, what share of the value has not moved in over 90 days? Above twenty percent, there is a problem.
2. When sales promises a customer a date, does production know? How do they know? Shouting in a WeChat group = a systemic problem.
3. Can you tell me the on-time delivery rate of your top three suppliers? If you cannot, then you are managing by feel.
If one of the three applies to you, your supply chain has room — and that is exactly what each piece here will be about. (The ratios above are rules of thumb, for reference.)
The next one is the saddest scene I have ever watched: "Thirty Million in Inventory? Don't Cut the Orders Yet." When managers see high inventory, their first move is to stop buying. The direction is exactly backwards.
Twenty-four years in, I have stepped in a lot of pits ahead of you. We will fill them in one at a time.