For manufacturers, the demand to produce more while reducing internal lead times is a seemingly constant battle. As a result, so too is the ripple effect of heightened expectations throughout the supply chain.

This comes down to the ability to control costs with consistency—and the methods for doing so tend to vary based on your position in the supply chain. Whereas OEMs (original equipment manufacturers) or contract manufacturers may have good visibility into forecasts, others further down the supply chain could be limited on this front.

Those that fall into the latter category could benefit from working with partners to establish a reliable historical perspective of your business. This starts with helping partners obtain a deeper understanding of your business, your relationships throughout the supply chain and your overall product mix. When combined with the material and process expertise of your partner, as well as visibility into market trends and their impact on your purchasing decisions, what you can work to establish is a base for making more accurate projections.

For example, taking a closer look at the annual volume you consume of a certain type of metal. Your history could be telling you one thing, but digging into key pricing indicators and broader economic factors could paint a much different picture of your demand levels. Overall, you want to ensure that you are not forced into a spot-buying situation down the road.

In all, it comes back to being able to project with a degree of certainty your pipeline of projects and the impact it will have on capacity.

This is simply one matter facing your business today. No matter your position in the heavy equipment supply chain, three critical matters underscore the new reality of doing business today.

  • The need to meet higher volumes under standard lead times. Being ready to make smart decisions fast on everything from material to equipment.
  • The need to ensure capacity can meet expectations. Having confidence that material and capacity are available even as spikes in demand become increasingly difficult to predict.
  • The ability to navigate through uncertainty. Taking the necessary steps to manage both growth and risk across all areas of the business.

It could be time to take a deeper look at these three heavy matters facing your business today and start the conversation with partners on how to address each going forward.

 

 

The Gauge Ideas

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