Your supply chain can respond to changes in volumes and product mix
 
The ability to respond to changes in demand for different products, and the number of items required, is growing in importance as customers seek to find sources for products that closely match their requirements. This leads to an increase in   product variety and a reduction in production volumes for each particular type
Key Issues
·         Staffing levels and hours worked remains one of key factors affecting output
o     Meeting higher seasonal demand means excessive overtime or an increase in the workforce by recruiting temporary staff
o     Staffing must be set at economic levels to meet underlying demand patterns, whilst contingency plans are in place to manage peaks and troughs
o     Train the workforce to be able to perform a wide range of tasks and agree flexibility terms with them.
o     Rather than keeping your production volume proportional to available working hours, consider introducing annualised hours with holiday restrictions at times of peak demand
·         Components should be classified as:
o     core components – made in-house because they protecting your knowledge and provide competitive advantage
o     non-core items - made in house through slack periods and bought out at times of peak demand, therefore can be made in or bought out
o     purchased items – always bought out
·         Standard or existing components should be used wherever possible and bespoke items consistently reviewed and replaced with standard items
·         Where possible, suppliers should be involved in your product design process in order to plan for variants and allow their knowledge and facilities to be exploited
·         You should hold regular management supply chain review meetings to agree actions with your suppliers.
·         You should also develop contingency plans and detailed risk assessments to mitigate against unplanned events and / or disasters disrupting deliveries.
·         All manufacturing information must be accurate, current and made readily available to everyone who needs it, using electronic communications.
·         Planning rules must be established governing the magnitude of changes allowed within specific time frames
·         Your and your suppliers’ manufacturing operations should be encouraged where volumes permit, to introduce focussed modules with multi-skilled teams responsible for delivering particular product families on time
Factors for Success      
Factors to  Avoid
1.     You adopt appropriate stocking policies
2.     You ensure everyone involved in your supply chain has visibility of expected demand
3.     You use tactical off load at peak times
4.     You plan for increases in variety and variations in volumes and know the commercial benefits this offers
5.     You have an excellent relationship with your suppliers
6.     Your suppliers are consistent and reliable
1.     Expecting production to cope with changes without investing in equipment to support the change.
2.     Building excessive stocks to cope with uncertain seasonal demand
3.     Being too vertically integrated
4.     Working with extended supply chains that cannot respond quickly
5.     Working with inaccurate information
6.     Purchasing from poor quality suppliers
Who does this apply to?
Managers involved in the supply and manufacture of components
Realisable Benefits
Higher profits through satisfying customers, more flexible, reliable manufacturing processes

Guides:

Logistics co-ordinationLogistics co-ordination

Logistics co-ordination

Uninterrupted material flowUninterrupted material flow

Uninterrupted material flow

Responding to changes in volumes and product mixResponding to changes in volumes and product mix

Responding to changes in volumes and product mix

Make versus buyMake versus buy

Make versus buy

The supplier approval processThe supplier approval process

The supplier approval process

Monitoring supplier performanceMonitoring supplier performance

Monitoring supplier performance

Sharing information with suppliersSharing information with suppliers

Sharing information with suppliers

Managing inventory throughout the supply chainManaging inventory throughout the supply chain

Managing inventory throughout the supply chain

Improving the delivery performance of suppliersImproving the delivery performance of suppliers

Improving the delivery performance of suppliers

Material flow and the factoryMaterial flow and the factory

Material flow and the factory

Production scheduling processProduction scheduling process

Production scheduling process

Calculating production capacityCalculating production capacity

Calculating production capacity

Visual managementVisual management

Visual management

Health and safetyHealth and safety

Health and safety

HousekeepingHousekeeping

Housekeeping

WasteWaste

Waste

Ensuring equipment is availableEnsuring equipment is available

Ensuring equipment is available

ChangeoversChangeovers

Changeovers

BottlenecksBottlenecks

Bottlenecks

Consistent manufacturingConsistent manufacturing

Consistent manufacturing