Learn why forecast sharing is smart business, especially during today’s supply chain disruptions.
Sharing your forecast with Elasto Proxy can help you to reduce supply chain risks and costs for industrial rubber products. Yet, some procurement professionals are reluctant to share this information. Maybe it’s because their company’s policies prohibit it, or maybe it’s because they don’t think they have enough data – and in the proper format. Regardless, these buyers and purchasing managers are missing out on potential benefits that include shorter lead times, fewer stockouts, and volume discounts.
Recently, Elasto Proxy spoke with a customer that is sharing its forecast with us. During a time of global supply chain disruptions, this North American manufacturer is avoiding problems like the ones so many other businesses face. To provide you with a sense of the company’s operations, its procurement personnel are responsible for ordering approximately 7000 different parts from over 400 vendors. There are also multiple production lines, each of which needs different rubber materials.
That’s a lot to manage, of course, but it’s not the only reason that forecast sharing is smart business.
Forecast Sharing, Blanket Orders, and Releases
There are many different types of enterprise resource planning (ERP) software, and our customer has worked with both SAP and Oracle before. Today, however, this manufacturer uses a material resource planning (MRP) system from a name you might not recognize. What matters, however, is that this forecasting software meets our customer’s most important needs. For example, the MRP analyzes open sales orders, existing forecasts, and in-process purchase orders over a period of several months.
Even if a forecast isn’t 100% correct, our customer still shares it with us so that we can anticipate demand, buy more materials, and account for potential problems such as shipping delays. The manufacturer has issued a blanket purchase order to Elasto Proxy, and we use it to release products against predictions Each month, the customer sends us an updated forecast as an Excel spreadsheet. We then upload this information into our own MRP and plan our material purchases and production activities accordingly.
In-House Planning and On-Time Deliveries
At the start of each fiscal year, our customer prepares a master production plan for the next 12 months and then revises that plan every three months based on changing conditions. Sales forecasts are also released at the beginning of the fiscal year but are reviewed and adjusted quarterly. Order sizes are kept small and are designed to meet the company’s objectives for inventory turnovers. Certain parts turn less quickly than others, of course, and our client conserves cash by not buying more than what’s needed.
On-time deliveries are important to our customer, and we’re proud to report that Elasto Proxy’s performance percentage far exceeds the 85% minimum. As a result, and because of our steady access to silicone materials and products, we’ve earned additional business that once went elsewhere. With the global silicone shortage, even commodity silicones can be difficult to source these days. With our supply chain strength, however, we can supply specialized silicones that meet tough industry requirements.
Forecast Sharing is Smart Business
Elasto Proxy is grateful for the trust our customer has placed in us and hopes that what you’ve learned in this article will encourage you to deepen your partnership with us. Now is the time to share forecasted demand so that you can ensure your own steady supply of industrial rubber products. As global supply chain disruptions continue, we’re already talking to companies that are looking at what they need for 2023. Are you looking that far ahead and, if you’re not, what’s stopping you from getting started?
Contact us to discuss your own forecast, and how you can share it with us.