Selecting the Right Supplier Part 2: Evaluating Capacity Needs

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By Carlo Mears | Aug 08, 2012
Evaluating Capacity Needs

Today’s turbulent times, combined with our global market, has made it even more important to know that your supplier has the capacity to overcome any challenges. When the auto industry threatened to collapse any manufacturer that only supplied the big three automobile manufacturers suffered. It is important to make sure if this were to happen, your supplier wouldn’t have to cut employees, which would inevitably delay production of your parts. Make sure that if something happens to your supplier they have the sources and ability to deliver the parts they promised you on time. Here is the second installment of our three-part series – selecting the right supplier. To read our first blog in this series, click here.

Capacity: No matter how big or small your project, you want to know that the supplier you choose is reliable, able to handle the work involved, and expand to support your business as it grows. Because your manufacturing process relies on the timeliness and quality of OEM parts, making sure the supplier you hire is able to handle the work and time constraints for your project requires you to evaluate a variety of capacity criteria.

  1. Current Excess Production Capacity: You will want to know how many facilities the supplier has and how many workers they employ. If there is a surplus of work at one facility is it possible to ship to other facilities to ensure on-time delivery? Basic things to look for include:
    • How many facilities have the ability to produce your parts?
    • How many people at those facilities have the training to construct your parts?
    • How far away are the other facilities?
    • What are the manufacturer’s transportation constraints?
  1. Integrity of Their Supply Chain: How solid and trustworthy are the people you rely on to supply you with your raw materials or parts that go into the equipment you are manufacturing?  In other words, how trustworthy are your suppliers’ suppliers? If your product requires a specific adhesive you need to know that they are using an adhesive supplier that is just as reliable as they are. Any interruption in one part of the supply chain could result in a delay. Every part of the chain affects the quality and timeliness of your product; make sure every part of that chain is dependable.
  1. Disaster Aversion: Hurricanes, earthquakes, strikes, oh my! There are many instances that could cause a delay in delivery of your parts. You need reassurance that there is a plan in place in case of an unexpected interruption in production.
    • What measures does the supplier have in place to make sure a disaster won’t affect your projects?
    • Is there a back-up plant that they can easily transition your job to?
    • How nimble is your supplier?  Can they quickly react and overcome an interruption?
    • How does your supplier prepare for disasters?  What precautions do they take?

Click here to read the next and final article in this three-part series on how to evaluate a suppliers’ commitment to their customers when partnering with a new supplier.