Class “C” components play a large part in any manufacturing process.  To better understand their importance we should start with what is defined as a “C” component. Purchasing staffs typically stratify their procurement costs based on the dollar value of the product.  “A” and “B” items represent raw materials and other large value products typically the 20% of the parts that are 80% of the purchases.  “C” components are the opposite-the large number of relatively low value components that are required to produce the end product.

“C” components tend to be low $ value.  They are typically low cost and/or low volume.

These components can have significant impact on the manufacturing process.  Downtime is the enemy of any manufacturing facility.  Studies have shown that 80%+ of production downtime is related to inexpensive components (C items).

Many companies try to manage these parts as they do any other component.  The cost of a purchase order is high in relation to the value of the purchase.  Typically, the company does not have the same leverage with “C” sources so they have difficulty receiving parts when they need them.

Managing these parts is typically not a core competency of major manufacturers.  Their cost to purchase and manage is high in relation to the purchase value.  Turning these products over to a Vendor Managed Inventory (VMI) program such as Falcon Metal’s can have significant impact.  A VMI program can reduce production downtime and reduce the customer’s Total Procurement Cost (TPC).  That would allow them to focus resources on their major purchases.