Listening and talking to suppliers and smart forecasting are key.
To ensure smooth operations, you want to provide your entire supply chain with visibility and information at every step in the manufacturing process. Especially in a lean manufacturing environment, the need to keep inventory low and lead times short makes open communication imperative. John Kerr, purchasing manager at wind industry supplier NRG Systems, describes their supply-chain communication strategies.
Annual supplier summits, either live or virtual, bring together core companies in the supply network. Kerr says, "We update them on the wind energy industry forecast, brainstorm and share ideas about quality initiatives and process improvements, and show them our lean manufacturing environment and how their companies feed into that process."
Supplier site visits help ensure that NRG System's business systems are performing as designed as well as helping them better understand suppliers' processes. "Seeing how changes in our needs during the monthly business cycle affect their processes is invaluable and lets us explore options," Kerr says.
Listening is an important part of the communication process. Kerr continues, "Our suppliers have recommended changes in our processes to improve flow in their manufacturing environment and these have created a smoother flow for us as well."
Working with suppliers to ensure a constant flow of raw materials to serve demand allows NRG Systems to capitalize on market opportunities. Kerr explains, "Keeping this process fluid reduces non-value added expenses when demand increases because you avoid surprising your suppliers and needing to expedite materials."
At NRG Systems, forecasting, or predictive planning, utilizes supply models based on anticipated customer demand. Kerr says, "The models monitor recent history and identify business trends, giving us time to plan and react. It's a continual balancing act between our forecast and our actual supply needs, and these supply models help us do it well."
The geographic location of suppliers is important. "Working with suppliers closer to our Vermont operations not only enhances communication, it minimizes the environmental impact of transportation and helps avoid delivery delays, especially during the snowy winter months," says Kerr.
Although manufacturers may work with their suppliers differently, Kerr believes one thing they probably all agree on is the importance of effective supply-chain communication.
John Kerr, CPM, has 32 years of supply chain experience. NRG Systems manufactures measurement equipment for the global wind and solar energy industries. More information about the company can be found at www.nrgsystems.com.
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