A global solar panel manufacturing firm secured new production contracts, but supply chain complexities made it difficult for the client in meeting its new customer orders. Infiniti’s inventory management solution helped the client to improve its strategic decision making and close around 15% gap between actual on-time delivery (OTD) and targeted OTD.
Solar Panel Manufacturing Industry Overview
According to Infiniti Research, the solar panel manufacturing industry is projected to exhibit substantial growth through 2022 as a result of the steady increase in the demand for solar power. However, uncertainty lies ahead as well. Globalization, fast-changing market conditions, quality issues, and security and operational risks to supply chain are increasing challenges for companies operating in the solar panel manufacturing industry. This challenging market environment pressurizes solar panel manufacturing companies to take actions to mitigate supply chain disruptions and build a resilient supply chain for the future.
The COVID-19 pandemic has caused a significant impact on the manufacturing industry worldwide. At this challenging time, business leaders must focus on achieving rapid cost reductions in supply chain processes. Our inventory management solution can help you to achieve this strategic objective. Request a FREE proposal here.
Business Challenge
The client is a solar panel manufacturing firm based out of Sweden.
Owing to rapidly rising raw materials prices and supply chain complexities, the solar panel manufacturing firm faced difficulties in delivering products on time and on budget. As a result, they were losing contracts with current and new customers. This subsequently resulted in a palpable short-term impact on the company. In an attempt to win back contracts, they wanted to revamp their traditional supply chain model. They collaborated with Infiniti Research to understand the root causes of these challenges, develop an alternative organizational structure, and manage procurement challenges.
Other key objectives of the solar panel manufacturing firm were:
- Reduce the number of suppliers
- Increase the number of long-term vendor contracts
- Understand the flexibility of key suppliers to shift production and purchase order fulfilment to other locations
- Manage supply shortages and bottlenecks
- Increase coordination between supply chain tiers
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Our Integrated Approach
The experts at Infiniti Research conducted a comprehensive analysis of the solar panel manufacturing firm’s supply chain processes. This involved mapping the value stream and developing a commodity management fact base for key categories. Our experts also benchmarked the client’s supply chain processes against the industry best practice.
The inventory management solution also involved conducting market scanning and monitoring and root-cause analysis of the major problems and bottlenecks. Besides, our experts conducted a risk assessment to understand the current and potential risks faced by the client’s key suppliers. Our engagement also involved an analysis of ongoing cost-pressure in the market, competitors’ strategies, and changing pricing structures.
Based on the analysis, our experts identified certain obstacles that were hampering the solar panel manufacturing company’s growth.
- Inadequate planning and scheduling led to unnecessary downtime and scheduling gaps in the organization
- Organizational disconnect between critical strategic sourcing activities and buying-unit decision-makers
- Unclear accountability for procurement decisions
- Lack of coordination between Tier1 and Tier 2 suppliers
Business Outcome
By thoroughly analyzing the solar panel manufacturing firm’s supply chain complexities and bottlenecks, the experts recommended the client to create commodity-based buying groups that integrate strategic and tactical buying decisions, with a single commodity manager responsible for all commodity purchases. In addition to this, Infiniti’s inventory management solution helped the solar panel manufacturing industry client to streamline its vendor base and reduce procurement costs by 10%.
Infiniti’s inventory management solution also enabled the client to understand the flexibility of key suppliers to shift production and purchase order fulfilment to other locations, increase coordination between supply chain tiers, and close around 15% gap between actual on-time delivery (OTD) and targeted OTD. The client was also able to sign new contracts and achieve a 9% cost reduction in pending and previously signed contracts.
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