'Inform your suppliers for success'

17 May 2000
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18 May 2000 | Elizabeth Bellamy

Sharing information with suppliers and customers and better e-commerce systems are the way forward for off-road vehicle manufacturers, according to the head of a UK engine manufacturer.

Mike Baunton, president of diesel-engine maker Perkins Engines, said that changing relations with suppliers, increasing customer demands and developments in e-commerce were changing the way the firm, which produces more than 300,000 engines a year and sells to 160 countries, operated.

E-commerce would allow Perkins to produce custom-made engines, Baunton told a company conference in Peterborough this month. "Customers' needs are ever-more sophisticated and soon the traditional image of them buying standard engines off a production line will no longer hold true," he said.

The company is implementing a new enterprise resource planning system to improve customer relations and supply chain management. Work on the new system, which will replace 80 per cent of the firm's existing processes, started last year and is due for completion by the end of next year.

The new system would allow Perkins to integrate its operations, said Richard Cotterell, project manager in the product supply division. Suppliers could check the status of production and monitor stock and requirements to allow just-in-time delivery.

Customers could track the progress of engines through the design, parts-procurement, manufacturing, testing and delivery stages, he added.

To promote closer working with customers and suppliers, Perkins has launched a virtual integrated partnership scheme. Baunton said the trend to integrate suppliers more closely into the business was prompted by the consolidation of suppliers and the increasing complexity of diesel engines.

But the supply chain would need to "lift its game" to survive, said Andrew Graves, professor of automotive studies at the University of Bath School of Management. By 2005, electronics would dominate the industry and firms would need global supply chains to cope.

SMmay2000

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