Forecasting—It’s More Than Inventory Management

Adding forecasting tools turns on multiple benefits for switch maker


Further benefits gained

The new system and better data also help NKK Switches’ Scottsdale, Arizona team provide more visibility to its counterparts in Japan and Hong Kong—who now can build to forecast rather than build to order. Rather than waiting for hard orders, manufacturing facilities could anticipate demand, which reduced NKK’s lead time by nearly 50 percent.

“That’s become the real power for us—just helping our manufacturing facilities better understand what we’ll need over the next six months,” said Schultz. “It’s easy for us to give them information they never had before. They can plan their production and work with their suppliers. That visibility has been invaluable.”

All of this also equates to NKK Switches’ customers benefiting as well. Selling and distributing globally—but primarily in North America, Central America and Mexico—the company shortened its lead times.

“That’s hard to do when your suppliers are in Asia and you can’t give them good visibility on what your needs are going forward,” added Schultz. “We would be faced with very long lead times that customers struggle with. We can see this evolution that will shorten lead times on a lot of these products for a lot of customers, and that will do nothing but improve our position in the marketplace. That’s where the real payoff will come. Not just reducing inventory or saving time on people managing the inventory but being more responsive to customers’ needs. To me, that’s the overarching benefit of this software,” he concluded.

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