Lean Strategies to Cope with a Volitile Supply Chain

We’re currently feeling the effects of the market on our builds and our attempts to go lean.  In the first few months of this year, we have faced the thrill of victory and the agony of defeat.  “Orders are increasing – Yes!!!”   “Wait, what do you mean the lead-time for the parts I need has doubled?”

Given that 2009 was so much of a challenge for everyone, a lot of manufacturers have been unwilling to add shifts, labor or capacity even though orders have steadily been increasing since December.  Everyone has taken a “wait and see” approach in case the increases are just a blip on the radar.  Because of this, the only natural evolution is that as orders increase, the lead-times for parts increase.  So, we have seen our orders for parts we need to build greatly increase in lead-time.  In one instance, we were notified that a part due on our dock in 4 days would not arrive until September.  September!

How do we get around this?  First and foremost, work closely with the customer.  Letting the customer know the issues we are seeing may result in A) An offer to help, B) an unknown alternative surfacing, or C) a collaboration within the customer that yields help.  Too often, companies are hesitant to let a customer know that they are having any sort of issue until they have exhausted every last opportunity and missed on every last wish/hope.  Generally, at that time, most companies let the customer know and it is far too late for the customer to make any alterations to their schedules.  This usually leads to the first question of “How long have you known about this?” followed closely by “And you’re just telling us now?”

As we continue our lean journey, we are using these types of circumstances, when they do pop up, to investigate internally how it would be handled in a lean environment and countermeasures to use to avoid such instances.    From such tools as buffer inventory against vendor lead-times to pull replenishment on parts, we are able to better position ourselves to accommodate customer increases.  But if, and only if, we are in constant communication with our customers and vendors as partners, will we succeed.

David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corporation.