To ensure smooth operations, you want to provide your entire supply chain as much visibility and information as possible throughout the manufacturing process. In a lean manufacturing environment like ours, it’s also important to keep inventory low and lead times short, which makes keeping the lines of communication open at every step in the process even more imperative. But many managers wonder exactly how to do that. We approach this in several ways at NRG Systems.
Five Strategies To Communicate with Suppliers
- In 2010, we organized our first-ever Supplier Summit, bringing together a core group of companies who create the backbone of our supply network. The purpose of this two-day summit was to update suppliers on the wind energy industry forecast, brainstorm and share ideas about quality initiatives and process improvements, and allow suppliers to see our lean manufacturing environment and how their companies’ feed into that process.
- We also visit our core suppliers at their sites to make sure our business systems are performing as designed and to better understand their processes. Having insight into how changes in our needs during the monthly business cycle might affect their processes is invaluable and lets us know what options might be available to us. This also helps keep our replenishment lead-times short and ensures that our kanbans have the needed materials to fill customer orders.
- Listening is an important part of the communication process. Over the years, our suppliers have made excellent recommendations for process changes that have created a smoother flow in their manufacturing environment which, in turn, have created a smoother flow in our process. Listening to your suppliers’ recommendations can create win-win opportunities for both you and them.
- We work closely with our core suppliers to ensure a constant flow of raw materials—critical components in our processes—to serve our future demand. This takes the form of bonded inventory and accelerated payments from time to time and allows us to capitalize on market opportunities. Keeping this a more fluid part of the process reduces the amount of non-value added expenses by avoiding the need to surprise your suppliers and expedite materials when demand increases. Our forecasting, or predictive planning, has been enhanced by the creation of supply models that are based on anticipated customer demand. These models allow us to keep an eye on recent history and identify business trends, giving us time to plan and react without putting an inventory burden on our suppliers or surprising them with unexpected orders. It’s a continual balancing act between our forecast and our actual supply needs and these supply models are a key component for doing that well.
- The last item that’s important to us as a manufacturer is the geographic location of our suppliers. Working with suppliers who are located closer to our Vermont operations not only enhances communication, it also allows us to minimize the impacts of transportation on the environment and delivery delays (especially during the snowy winter months).
Every manufacturer may work with their suppliers differently, but one thing we can probably all agree on is the importance of effective communication to the process. What ways have worked well for you and your suppliers? I look forward to hearing your thoughts, experiences and ideas for creating a robust supply chain.
John Kerr, CPM, NRG Systems Purchasing Manager, has 32 years of supply chain experience. He’s our “go-to-guy” for working with suppliers and getting the goods we need to keep the manufacturing line running smoothly.