When the federal government's "Cash for Clunkers" program was in full swing this summer, automakers realized they weren't quite prepared for such an increase in demand. For instance, Honda Motor Co. was forced to add overtime shifts in September because of dwindling inventories related to increasing sales. If economists are correct that the economy is in the recovery stages, manufacturers will need adequate inventory levels to meet customer requirements. Sunderesh Heragu, a professor in the University of Louisville's department of Industrial Engineering and director of the Logistics and Distribution Institute, says in preparation for an economic recovery, manufacturers should:
Be in close contact with major customers to gauge the timing and size of orders.
Sunderesh Heragu, Professor, University of Louisville, Department of Industrial Engineering and director of the Logistics and Distribution Institute
- Assess the sourcing landscape to ensure required materials can be procured quickly from past (and new) suppliers.
- Ensure processing capacity and labor are available and in top condition for production ramp up.
- Maintain adequate inventory of Class A items.
- Be prepared to take on new business because the number of manufacturers in your domain may have shrunk.