Product demand can be difficult to predict. With China championing itself (quite successfully) as the new leader of globalism and uncertainty happening in the Eurozone—as well as South America and part of Asia—manufacturers are finding that sourcing through traditional suppliers has become challenging. Companies are struggling to provide accurate forecasts in a timely manner, limiting the supplier’s ability to manufacture and deliver on time. As such, supply chain organizations are seeking to improve their ability to respond quickly to changing market needs by functioning from an on-demand model, rather than maintaining large, long-term inventory.
This strategy is often referred to as lean manufacturing, the concept that products should flow through a lean organization at the rate the customer needs them without being caught up in inventory or delayed. In other words, pulling the value according to the customer’s demand. Manufacturing components in lower volumes is believed to increase supply chain efficiencies by reducing lead times and minimizing risks associated with wasted inventory or product elimination.
This changing market demand requires more domestic U.S. support and regional in-sourcing than ever before. One U.S. manufacturer of hydraulic fittings and adapters, Olivet, Mich.-based Air-Way Global Manufacturing, has continued to increase its domestic manufacturing capacity.
Near-sourcing makes it easier to communicate and manage changes in the supply chain when manufacturing is closer to the customer base. It brings an added element of flexibility allowing suppliers to “roll with punches” and adjust production schedules easily and quickly, meeting the changing demands of their customers. Air-Way has always kept a sizable inventory of forged stock and due to these market demands, are now adding more sizes, ensuring a breadth of materials are on-hand when needed.
Adjusting to Market Demands
This change in market trends, like digitization of supply chains for example, has impacted the company’s efforts to continue serving OEMs and distributors in the most efficient way possible. Adding to an already extensive inventory means their products are on-hand and ready to ship when needed. Air-Way specializes in vendor managed inventory, short lead times, and order expediting, which ensures orders are fulfilled on demand.
Air-Way has improved their manufacturing facilities to meet the immediate demands of their customers, including:
- Added a new Computer Numerical Control (CNC) machine, and are in the process of installing more.
- Increased production by adding another shift to its Michigan plant.
- Machining parts 24 hours a day, 7 days a week.
- Forged fittings generally have a longer lead time, but due to increased inventory of bar stock, forged blanks, additional materials and machining capabilities, the company can deliver parts domestically within in days.
- Increasing supply of nuts, washers, O-rings, etc., as well as raw materials on-hand to complete high quality hydraulic fittings quickly and efficiently.
Recently, while manufacturing hydraulic fittings for a valued OEM customer, a shipping issue occurred and materials needed to complete the job were delayed. The OEM client needed the custom fittings (a large forged T-fitting) urgently and Air-Way wouldn’t let the materials issue impede delivery. The company identified another material in-house that was suitable for this kind of hydraulic fitting (stainless steel forged blanks). Based on the client’s specifications and part requirements, Air-Way’s engineers drew up a customized design that met the customer’s expectations using the alternative material. They immediately programmed the CNC machines and commenced production. The fittings were shipped to the customer within the deadline and to their exact specifications, all within 24 hours.