It is important that suppliers understand the Demand Flow manufacturing philosophy and associated technology used in a manufacturer's plant and processes. This assists the supplier in understanding the manufacturer's internal needs, designs, and specifications.

The manufacturer must explain its strategies to the entire supplier base, focusing initially on the first wave of parts that are involved. Suppliers should understand that reducing the total number of suppliers means greater volume for the remaining suppliers. The explanation of flow strategies to the supplier includes:

• Involvement in the design process

• Contract/blanket purchase orders and implementation of quantity releases

• Flexibility requirements and management

• Packaging strategies

• Transportation strategies

• Single-sourcing goals

• Quality-at-the-source techniques

• Demand Flow manufacturing forecasting contracts

• Use of advanced communications

• General strategies

Instead of issuing traditional single purchase orders, the manufacturer and suppliers negotiate a DFT contract and requirement releases made against the contract. The supplier and manufacturer use computer-driven electronic data interchanges to enable simple releases, with less paperwork, to support more frequent deliveries. The use of fax communications to pull mutually agreed-on kanban quantities into the manufacturer's process is another popular success. While the frequency of deliveries will increase, a corresponding increase in product costs is not acceptable. The manufacturer focuses on reducing the quantity of parts in the bill of material and reducing the quantity of part numbers. If the Demand Flow manufacturer started with 5,000 suppliers, it should concentrate on reducing that number to 2,000, then to 500. Packaging is reviewed and possibly redesigned with an eye toward...