Executive Briefings

How an Integrated Supply Chain Enables First Solar's Top Business Goals

When integrating its two major business units, First Solar partnered with Kinaxis to provide supply and demand planning capabilities, says Shellie Molina, vice president-global supply chain.

First Solar makes solar modules as well as building and managing full-scale solar power plants, and this year the company integrated these two businesses, says Molina. A large part of this process revolved around the supply chain planning process. "Our prior supply chain model was very segregated, with our module business being managed apart from our systems business," she says. "The implementation this year of RapidResponse from Kinaxis as our single demand planning tool has opened up the opportunity for us to have common goals and objectives, and not siloed goals and objectives."

"We cannot hit our inventory targets just by the planning team doing its job," she says. "The sourcing organization has to have good contracts with our suppliers and our tactical execution team has to have tools to manage the inventory coming in and out. Functional goals alone are not enough."

Another of the key benefits provided by RapidResponse is around inventory availability, Molina says. She notes that until recently demand for First Solar's modules exceeded supply so there was not a big emphasis on planning. "As that changed, we needed to move to a more demand-driven supply chain," she says. "Rather than just building to capacity we needed to manage capacity based on demand." RapidResponse allowed the company to put triggers in place that indicate how much supply it should be producing, based on demand, she says. "These triggers, and understanding how to allocate product, are two of the big improvements that RapidResponse has enabled."

The scenario planning capabilities of RapidResponse are important to the systems business, she says, noting that First Solar is in the process of implementing this capability, along with Control Tower visibility. "There is a significant amount of churn around revenue recognition on our systems projects and understanding what our margin will be,"she says. "With RapidResponse, we can look at different scenarios upfront and quickly know which decisions to make. Today it may take us two to three weeks to do this analysis."

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First Solar makes solar modules as well as building and managing full-scale solar power plants, and this year the company integrated these two businesses, says Molina. A large part of this process revolved around the supply chain planning process. "Our prior supply chain model was very segregated, with our module business being managed apart from our systems business," she says. "The implementation this year of RapidResponse from Kinaxis as our single demand planning tool has opened up the opportunity for us to have common goals and objectives, and not siloed goals and objectives."

"We cannot hit our inventory targets just by the planning team doing its job," she says. "The sourcing organization has to have good contracts with our suppliers and our tactical execution team has to have tools to manage the inventory coming in and out. Functional goals alone are not enough."

Another of the key benefits provided by RapidResponse is around inventory availability, Molina says. She notes that until recently demand for First Solar's modules exceeded supply so there was not a big emphasis on planning. "As that changed, we needed to move to a more demand-driven supply chain," she says. "Rather than just building to capacity we needed to manage capacity based on demand." RapidResponse allowed the company to put triggers in place that indicate how much supply it should be producing, based on demand, she says. "These triggers, and understanding how to allocate product, are two of the big improvements that RapidResponse has enabled."

The scenario planning capabilities of RapidResponse are important to the systems business, she says, noting that First Solar is in the process of implementing this capability, along with Control Tower visibility. "There is a significant amount of churn around revenue recognition on our systems projects and understanding what our margin will be,"she says. "With RapidResponse, we can look at different scenarios upfront and quickly know which decisions to make. Today it may take us two to three weeks to do this analysis."

To view video in its entirety, click here


Keywords:  supply chain, it supply chain, supply chain management, it supply chain management, supply chain management it, supply management, supply chain management scm, inventory management, inventory management it, inventory control, global logistics, logistics management, logistics & supply chain, supply chain solutions, inventory management systems, logistics it solutions, supply chain planning, supply chain systems