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In this series, we put a spotlight on the unspoken needs of Glass Suppliers, so that glass buyers can trade their exemplary customer behaviour, for the best possible pricing.
Today our countdown moves to Need Number 4 – “Forecast Accuracy”
So, sitting deep within the office confines of every glass producer, most often behind a computer screen and far away from the excitement of front line of sales/customer interaction, is a team of planners. Their job is probably one of the toughest and most unappreciated of all roles inside a manufacturer, particularly a glass manufacturer!
Their role is to collect anticipated customer purchase demand, in both verbal and numeric form, from exceptionally optimistic and sometimes misguided salespeople. Thereafter they must convert this data into what must become the most realistic and viable production plans for those that will make, store, and deliver the product, just when the customer needs it! How hard can that be?
Well, turns out it is incredibly hard – so hard that glass producers globally now need to do something very decisive about it. Where in the past they would make excess stock to create a buffer and shift it around warehouses to respond to demand spikes, today they cannot afford the working capital implications. They do not want to be funding a customer’s inability to forecast unless you happen to be one the very biggest glass buyers and your volume underwrites some 33% + of furnace demand. If that is not you, then take heed of these words from master negotiator Mark Spatz – “If you … I will!”
That is – If YOU the Glass buyers can commit to a regular minimum monthly purchase quantity over a year … your glass provider WILL afford you a better price & crucially, a supply guarantee.
Now many customers shy away from this concept & it is to their own detriment. Forecasting does not need to be hard and you can always build in buffer variances.
Here are a few easy techniques to explore:
- Let history be your guide: Continue your annualise demand trends and smooth out the monthly bumps
- Fixed & Floating: Just like a mortgage you can lock in 65% of demand and have the balance floating
- Take or Pay: Commit to a minimum volume for the year, safe in the knowledge you will use any leftovers next year
The beauty about proposing these conditions is that it creates baseline certainty for both yourself and your packaging supplier. Thereafter, it means your place in the production queue is protected, so if the proverbial hits the fan, as it often will in manufacturing, you have a supply guarantee up your sleeve. Ultimately, this all about a mutual respect.
And one extra tip for those of you who take your supply partnerships seriously. Those teams of planners I mentioned upfront are human. They are real people, with a name and a phone number. And if you take the time to get to know them, and perhaps send them a sample of your finished products, you may just create a caring friend with a vested interest in seeing your supply needs looked after. And don’t we all need caring friends!
Buy well & in our next episode, our countdown moves to Glass Supplier Need number 4!