Direct Line Feed, usually is known as being the process of making sure that you get the supplies you need, when you need them. Suppliers effectively ‘feed’ supplies through to the production line, so there is a constant supply of all components required.
The process of Direct Line Feed is usually outsourced, so all the responsibility for the provision of supplies actually rests with the supplier. There are huge benefits to be had for companies who choose to use this process and they are all very sound business reasons.
Reduce Costs
First of all the main reason that companies choose to outsource the provision of supplies directly to the supplier is that it saves them money. Supplies no longer have to be stored in such great numbers because they can be ‘drip fed’ almost continuously onto the production line.
The responsibility for ordering supplies is also far less labour intensive because it can be done electronically and almost on demand, so if a big order comes in, then more supplies can be ordered, but if times are quiet, then less stock needs to be purchased. An effective fixed vs forecast ordering mechanism can take care of this effectively – and many organizations may couple DLF with a Kanban process.
In some instances the supplier actually takes responsibility for the inventory control, electronically assessing how many items have been used by the use of pioneering electronic data systems, that keep the supplier constantly updated with regard to the number of items that need to be replenished.
Since there is less need for staff input using a system such as this the company who outsources this contract can reduce the labour costs involved with ordering and replenishing supplies.
Reduce Paperwork
Through having less labour intensive processes involved in the replenishment of stock costs are lowered, but there is less paperwork as well, so the pain of constantly having to order stock, organise its storage, deal with over or under supply of stock etc is completely eradicated. So the headache of all that paperwork while not completely eradicated can be reduced.
Clear Responsibilities
Through outsourcing the responsibility for supplies, a company can ensure that it places all responsibility for maintaining stock levels with the company who are providing the Direct Line Feeds.
So there is no confusion, no arguments about who ordered what and why it didn’t arrive, especially if electronic data systems are used to monitor stock levels without the need for any orders being placed at all.
The supplier will obviously want to retain the contract, so they are keen to ensure that the contract works out and will certainly want to work with the company to make it a success. This benefits the company through having a very keen supplier who is anxious to make sure that there is a steady stream of supplies and that the system provided is seamless.
Indeed in order for this system to work properly it has to be a seamless process. It has to be one that involves no delays to the customer. Any delays will potentially jeopardise production and as such will probably result in the contract being cancelled.
Potential Drawbacks to Direct Line Feed Processes
The only drawback to a system such as this can be reluctance on behalf of staff to believe that it will work effectively. Staff who have been closely involved in the ordering and maintaining of supplies can feel particularly threatened by the introduction of such a procedure. Without doubt DLF takes a great deal of trust on the material providers and procurement teams to ensure that the right levels of materials are available at the right time.
However, when people have seen how efficient the new system is and how it can make production more efficient, reduce staff time in handling supplies as well as reducing the bureaucracy and paperwork associated with supplies, even those who never believed that such a system could work will actually be impressed and any resistance is usually short-lived!
