First Solar is a manufacturer of solar panels. It also provides engineering, procurement, construction and operations services for the building of large solar arrays. The company positions itself as a low-cost provider in its industry, says Bell.
Among its “pain points” is the need to balance supply and demand. Recently the company implemented capability for integrated project management, to bring itself closer to customers and their purchasing patterns. First Solar is now able to drive both planning and construction of its arrays deep into the supply chain. A new application from Kinaxis is helping it to forecast better, and respond more quickly to plan variances, Bell says.
The effort to improve planning was triggered by a sharp downturn in the solar materials industry. Toward the middle of 2012, First Solar began experiencing increasing cost pressures, with prices being driven down by competitors.
At the time, it was selling modules exclusively to distributors, mostly in Europe. But the pressure on margins drove it to expand into the engineering and construction sector. And that move, says Bell, “led us to see that planning was an integral part of our business.” It needed a better means of forecasting demand, so that it could “create value for our customers.”
First Solar faces a significant amount of market volatility, both as a supplier and technology implementer. Construction projects can be affected by a wide variety of factors that are beyond the company’s control, such as weather, soil variability and unforeseen environmental impacts.
“It means we have to be able to respond very quickly,” says Bell. “We need to be able to plan that in the project.” Critical decisions must be made in far less time than before, as the company hits the various revenue milestones that are built into its projects. “If we don’t meet plan,” Bell says, “we have huge ramifications for our customers.”
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Keywords: supply chain, supply chain management, high-tech supply chain, green supply chain, solar materials, inventory management, inventory control, supply chain planning, supply chain services, Jennifer Bell, systems analyst