Accurate forecasts are essential
Paul E. Teague -- Purchasing, 5/4/2006 2:00:00 AM
You've heard of business-to-business companies and business-to-consumer companies. This is a story about a business-to-country company.
Stratex Networks develops, products to enable development of complex communications networks, for the transport of data, voice and video. The $200 million company's customer list reads like a United Nations roster: France Telecom/Orange, Centertel Poland, Panafon Greece, China Unicom and MTN Africa, among others. And now, the company is providing product for Iraq.
"Our supply chain operations very challenging," says Paul Hanz, agile support analyst at Stratex.
They're challenging, in part, because of the discrepancy between the leadtimes required by the customers—ranging from three to six weeks—and the leadtimes of several key components, which can be up to 16 weeks, says Tim Hansen, senior director of supply chain management.
To solve that leadtime dilemma, Hansen and his team provide a rolling six-month forecast to the contract manufacturers they work with. On some items, that forecast extends out to 12 months. "We also establish stocking agreements for some key long-lead components with the contract manufacturers or with the component suppliers," Hansen says.
Those contract manufacturers are based in Thailand, Taiwan and Australia. "Planning is critical, and we need visibility as soon as possible when deals seem likely to happen," says Lee Jones, vice president for information technology.
Purchasing at Stratex is a centralized function reporting to the vice president of global operations. Purchasing selects suppliers, negotiates terms and works with the contract manufacturers as they gear up to build the products. The supply base also includes six other companies, including those that supply the antennas, cables and transceivers.
"We have one person identified as the lead supplier manager for each contract manufacturer," says Hansen. Key metrics include: on-time delivery, cost, leadtime, quality and order-acknowledgment response time.
To keep track of product development, Stratex uses Agile PLM (product lifecycle management) software in combination with Oracle for ERP (enterprise resource planning). "We create bills of material and record engineering change orders in Agile and distribute them automatically to the Oracle system," says Jones. The interface enabling the transfer is application management services from Sierra Atlantic, an Agile partner. Sierra Atlantic's SCMNet product uses the engineering change orders to sync up the bills of materials between engineering and manufacturing.
"SCMNet is so reliable that practically the only time I call them is to get enhancements to the product," says Hanz.
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