Page 6 - MetalForming February 2016

Editorial
Brad F. Kuvin
One Word Likely to Define 2016: Volatility
I’m hearing it repeatedly: Production volumes and order frequencies are wildly fluctuating, as unpredictable as ever. For metalformers, this is pushing flexibility and responsiveness to the forefront. Consider this quote from Buckley Brinkman, executive director and CEO of the Wisconsin Center for Manufacturing and Productivity:
“(Manufacturing production) is more volatile than it’s ever been...Everybody is trying to shorten their supply chains and make them more responsive to the market and to the end consumer.”
As demand seems to change direction as often as the wind, accurate forecasting becomes critical to ensuring that suppliers (metalformers) remain profitable as they “go with the flow.” This means that metalformers, in the midst of a volatile market, need to snuggle up more closely than ever to their customers. They also must strive to expand their knowledge regarding their customers’ customers.
In short, you as Tier suppliers, must study the consumer markets impacting your production schedules, and collaborate with your customers to gauge their needs. Then you must effectively plan to meet their needs, efficiently and profitably.
Some key questions you might ask customers, to help you effectively manage volatility, include asking for the opportunity to help them manage their inventory, and asking if they will accept smaller orders delivered more frequently. While I know that many do not want to carry excessive inventory, and in most cases would prefer to steer clear of short runs that require numerous pro- duction-line resets, these scenarios will become more likely in the near term. And, maybe the long term, as customers increasingly are developing products with shorter lifecycles while demanding com-
pressed product-launch cycles.
To get started on optimizing the demand-planning process, con-
centrate on the top few customers and the products you manufacture
Getting closer to your customers and moving to complete (as much as possible) collab- oration is the trick to optimizing forecast accuracy. A recent article from supply-chain opti- mization strategists at The Hackett Group says as much, and offers additional advice. For example, metalforming-plant managers would be wise to immerse themselves in under- standing key market trends impacting the demand of the products they manufacture. At the very least, select a few of the most important products and become experts in demand- planning for them.
Better forecasts, particularly during volatile times, will minimize the safety stock your company needs to carry—lower average inventory levels and more frequent turns will result.
Editor bkuvin@pma.org
“Metalformers, in the midst of a volatile market, need to snuggle up more closely than ever to their customers.”
for them. How well can you predict when these products will sell and how much will sell? Do you know who buys the end products, and why they buy them?
4 MetalForming/February 2016
www.metalformingmagazine.com
© 2016 by PMA Services Inc. 6363 Oak Tree Blvd. Independence, OH 44131 216/901-8800 | fax: 216/901-9669 www.metalformingmagazine.com metalforming@pma.org
PMA President | William E. Gaskin, CAE wgaskin@pma.org
VP, Group Publisher | Andrew Flando aflando@pma.org
Editor | Brad F. Kuvin bkuvin@pma.org
Senior Editor | Louis A. Kren lkren@pma.org
Editorial Manager | Marlene F. O’Brien mobrien@pma.org
Art Director | Donna M. D’Amico ddamico@pma.org
Web/Graphic Design | Mike Novatny mnovatny@pma.org
Production Manager | Susan Cubranich scubranich@pma.org
Circulation Manager | Barbara Tillett btillett@pma.org
Asst. Circulation Manager | Melody Berendt mberendt@pma.org
Circulation Assistant | Terri Reid treid@pma.org
Sales and Marketing Staff
OH, Western NY, Western PA, Canada, International Andrew Flando, VP, Group Publisher 216/901-8800 | aflando@pma.org
MI, North Central, California Ryan King 773/414-9292 | rking@rkmediaadv.com
New England, Eastern NY, Eastern PA Frank Colonno 201/962-2759 | fjcolonno@optonline.ne
South Atlantic, South Central
Bob West
678/377-5749 | metalform_bobwest@msn.com
Inside Sales Manager
Ilene Schwartz 216/901-8800 | ischwartz@pma.org
Marketing Director | Susan Hunter-Vazinski shunter@pma.org
Marketing Coordinator | Rachel Rokoff rrokoff@pma.org
Marketing Coordinator | Kristen Kerns kkerns@pma.org
Meetings & Events Manager | Katlyn Stratis kstratis@pma.org
All rights reserved. Reproduction in whole or part without permission is strictly prohibited.
Use smart phone to go to www.metalformingmagazine.com