How NBP protects customers from supply chain risks
Disruptions from the pandemic, weather events, labor shortages, and warring nations have created a perfect storm of supply chain volatility for OEMs. But despite these challenges, New Berlin Plastics has continued to live its company value: “Find a way.”
In recent months, prices have steadily risen and inventory has been low or non-existent for many raw materials used in injection molded parts and inserts – including resins, glass, aluminum, brass, and stainless steel. Transportation backups have caused delivery delays. To combat these market disruptions, the procurement team at NBP has become extra vigilant:
“We have a solution-based mindset to help our customers get the products they need,” explains senior buyer Michael Fant. “We don’t sit on our hands and wait for things to change. This proactive, strategic approach is already built into our company processes.”
NBP buyers frequently talk with suppliers to understand the quickly-changing status of material availability and pricing. Before quoting a new injection molding project or running a production batch, they check with resin suppliers to ensure they can meet the needed quantities and timing.
“We’re always trying to be proactive and ask suppliers about availability and lead times before we place an order,” says senior buyer Dan Seifert. “It’s such a dynamic environment that we always want to work from the latest data.”
NBP shares its production forecasts with suppliers to reflect its customers’ future needs. This gives them the visibility they need to know what’s expected of them.
“We try to order materials even farther ahead than the lead times suppliers are recommending,” Fant points out. “We place purchase orders as far out in advance as possible, so our suppliers have ample time to prepare.”
When it makes sense strategically, New Berlin Plastics has been increasing resin inventory with certain materials. Stocking up on common resins helps to avoid future stock outages.
“Even if we don’t have an immediate need for a critical material, we’re stocking up now as a safety net,” Seifert says. “Sometimes that means accepting monthly allocations on some materials even if we don’t need them now. We bring the stock in-house to absorb the risk and protect our customers.”
Communication and alternatives
If a material is not available at the right price or timing, NBP looks for alternative materials or suppliers that will help them to better meet their customers’ demands.
This gives customers options to choose a different supplier or material. It’s always best to move to an already-approved material to avoid a new PPAP process, which can be costly and slower, Seifert indicates. If timing is the biggest issue, it may make sense to choose a domestic supplier with higher prices but immediate availability to avoid an expensive production shutdown due to a delayed part from a lower-cost overseas supplier.
The future looks tight
For the foreseeable future, demand from NBP customers is expected to stay strong, so material availability will remain tight.
Winter storms in Texas last year caused petroleum companies to shut down. Many resin production facilities still haven’t returned to full capacity. Some plastics are not yet widely available because they’re allocated to pandemic-related products such as test kits and protective gear. Glass, a common additive in some resins like nylon and polypropylene, may become even tighter in the coming year as Corning pulls out of the market.
“Our supplier network is still recovering from the impacts of COVID and last year’s storms,” Fant adds. “Until there’s additional capacity for material production and transportation, we will continue to face a balancing act to get what we need – well into 2023. But we’re committed to providing our customers with every opportunity to be successful.”