by Bob Zaruta, President/CEO, NWIRC
For on-time delivery to customers, manufacturers usually depend on on-time delivery from their suppliers. Quality products rely on quality materials or parts from suppliers. Being price competitive is based somewhat on prices companies pay their suppliers. Manufacturers know the importance of their supply chain to business, and as the idiom goes, ‘the chain is only as strong as its weakest link’.
MEP* Centers, like NWIRC, have been helping manufacturers for over thirty years with their critical business issues, including challenges with their supply chain. Carroll Thomas, Director of NIST MEP*, wrote a previous article on the Manufacturing Innovation Blog, titled, Supply Chain Foundations, that focuses on the interdependency and strength of the supply chain. Here are some poignant excerpts that capture some of her thoughts:
“U.S. manufacturing’s competitiveness depends on the performance of companies operating at all levels of the supply chain. However, supply chain competitiveness depends not just on the performance of each individual member, but also on how the elements of the supply chain work together and on their responsiveness to market demand.”
“Any manufacturing company’s growth is intrinsically linked to the performance of its supply chain. Companies cannot compete without other lean, flexible and innovative companies supplying necessary parts and components.”
“Managing supply chains requires integrating all the links in the chain into a seamless network. Orchestrating the flow of information and products—whether it is about new product needs, quality issues, costs, delivery, inventory, or something else—requires a deft touch, but also the ability to peer into the supply chain to make sure all the parts are working together smoothly.”
How often do you examine the relationships you have with your suppliers? Are the ‘links’ strong and working together? Have you shared specific expectations? NWIRC coordinated a recent project with a manufacturing company in North Central, PA to do just that. The company’s ultimate goal was to better meet customer demand, drive down variable costs, increase productivity, and improve competitiveness. To do this, they wanted their regional supply chain partners to better understand their individual role in the company’s business and seek ways to improve operations that would be mutually beneficial. Working with a lean expert, a supplier engagement event was coordinated in order to collaborate and set expectations for their key suppliers. In addition, site visits were conducted to each of these key suppliers to establish demand expectations, discuss solutions for reducing lead times, and improving overall communication. The outcome was an ‘orchestrated’ collaboration of all their suppliers working towards a common goal.
Have you examined the geography of your supply chain? ‘Made in America’ is a mantra we have all heard and appreciate. Companies that are able to manufacture their products in the U.S, and source required parts and materials here too, are proud to use this phrase. Companies often look overseas for sourcing the materials they need in order to reduce costs and offer a competitively-priced product, but there have been successful reshoring initiatives over the years that have increased domestic manufacturing and domestic sourcing. Nationally, OEMs are looking for more ‘American-made’ parts opening up opportunities to domestic small and medium-sized companies. There can also be benefits to sourcing at a regional-level. Not only does this activity help holistically strengthen the manufacturing industry for the entire region, but can have a positive impact to your business with potential reduction of lead-times and shipping costs. The Next Gen Manufacturing Partnership for northwestern Pennsylvania is in the early stages of working on a platform for companies to share capabilities and needs with the goal of increasing regional sourcing.
If you haven’t done it in a while, take the time to examine all the links in your supply chain to evaluate where you can gain more efficiencies. And, check out NWIRC’s events schedule for supply chain optimization programs scheduled this Fall.
* Hollings Manufacturing Extension Partnership (MEP) at the National Institute of Standards and Technology (NIST) of the U.S. Department of Commerce is a nationwide network of centers focused on helping U.S. manufacturers strengthen their supply chain integration and access new technology helping them to become more competitive.