Supplier consolidation. Build-to-order supply chain. Expansion into China. Growth by acquisition.

These strategies may sound like those of a Fortune 100 company, but they are, in fact, the strategies being developed by $700 million injection molding firm Nypro Inc. of Clinton, Mass. Nypro is using big-company strategies to streamline its supply chain and fuel its move to a build-to-order model in an unpredictable market for many of its end customers in the high-tech electronic, automotive and consumer markets.

Two years ago Nypro began consolidating its spend with two main distributors for much of its direct materials spend, gaining increased leverage with those distributors. As a result of the increased volumes and longstanding relationship, Nypro has seen increased attention and levels of service from the two distributors it has centralized its spend on.

But in addition to cutting down the number of links in its supply chain, Nypro wants to bring the links closer as they move to a build-to-order model to avoid carrying high inventory but keep its customers' manufacturing lines rolling steadily.

"It's all about demand-supply compression," says Bob Smetana, director of corporate sourcing at Nypro. "We're trying to synchronize our customers' demand with our suppliers' ability to provide materials. To coordinate that, we do as much forecast sharing as possible and watch consumption levels versus demand to make sure we have the right inventory levels. We watch PO commitments to make sure we don't extend them beyond the product lifecycle and we make sure inventories are tracking to customer demand. It's a daily, even hourly, environment at the plant level."

Nypro has moved from a model that revolved around making product for inventory to a model where it spends only on materials that will go towards building products ordered by its customers, notably those customers in the cell phone business due to its short product lifecycle. For example, Smetana says Nypro had one high-tech customer that needed to get a new product on the market as soon as possible before it became an obsolete design. To accommodate that schedule, Nypro dedicated two of its injection molding machines to that customer for nine months straight.

Global expansion is another strategy Nypro is implementing during the down economic market. The company now has five plants and 3,000 employees in China, and is focusing much of its work there on value-added services including in-mold painting and decorating and various assembly services in addition to its injection molding services. Nypro has also expanded its presence in Mexico to 1,500 employees, making it the largest custom injection molding firm in that country.

With such growth comes more complicated sourcing. Nypro still does much of its purchasing at the plant level, using purchasing agents and analysts at its 29 molding plants in 12 countries to analyze the local spend for each plant and look for savings opportunities. But as it grows, the company is focusing more on what sourcing efficiencies can be gained at the corporate level, looking for cost savings in its key spend areas, including 1,000 unique resins it buys.

One of those corporate-wide efforts, e-commerce, has been a challenge for Nypro in getting its raw materials suppliers online. Two years ago, the company adopted a Web-based PO posting system to streamline its direct materials buying processes but found its supplier adoption rates were too low, and the project did not provide the streamlining benefits expected. Nypro has since moved to an automatic fax and e-mail system to send POs to suppliers and has seen a much higher rate of adoption from its suppliers, finding the happy medium between technology curve and supplier readiness.

"We have about 10% of our total suppliers on that autofax system, but it covers about 60% of our POs," says Smetana, adding that R&D operations account for a high number of one-item suppliers with low PO volume. "The volume is there with this system and the technology is scaleable to other locations, so we're looking into other regions."