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RV makers are asking for a faster supply chain

Category: uncategorized
Source: The Elkhart Truth, Elkhart, Ind.
Publish Date: Thursday, December 3, 2009
Summary: LOUISVILLE, Ky. -- Behind every recreational vehicle, there stands a chain of suppliers providing the parts and accessories that go into each unit. The demand for toilets, televisions, sofas, refrigerators and such is growing with every increase in production manufacturers are making, but suppliers can't always ramp up as easily.

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 LOUISVILLE, Ky. -- Behind every recreational vehicle, there stands a chain of suppliers providing the parts and accessories that go into each unit. The demand for toilets, televisions, sofas, refrigerators and such is growing with every increase in production manufacturers are making, but suppliers can't always ramp up as easily.

Consequently, they are getting squeezed, as illustrated by a recent phone call to LTM Textiles, headquartered in California.

An RV maker -- actually the customer of a competing fabric supplier -- called LTM needing product, explained Craig Garvey, a representative of LTM. The manufacturer had to get the material quicker than the competitor could provide it so the RV company turned to LTM.

The fabric was in stock but LTM was holding it for another customer. Because supplying the caller would have left the client without, the textile company could not fill the emergency order.

Recreation Vehicle Industry Association President Richard Coon fears the industry's recovery could slow if suppliers struggle to meet growing demand from manufacturers. On the floor of the 47th Annual National RV Trade Show, supply companies acknowledged lead times are shorter but they maintained they will be able to provide the components as the RV makers need them.

"I haven't seen anything that's serious enough to stop production altogether," Garvey said. "I think it's a nuisance for the (manufacturers) because they have to keep screwing around to find something."

When the industry was booming, L&W Engineering in Middlebury, Ind., had two weeks to deliver parts, said Steve Krans, director of sales. The economic recession has shortened the lead time to about two days, although sometimes the manufacturers want the product yesterday and other times they happily tell the supplier to take a week.

"I think as the industry upturns that will change because they'll feel more comfortable about building units for inventory instead of for orders," Krans said.

L&W fabricates parts from steel and aluminum, primarily for RV builders. To guard against a kink in its own supply chain, the Middlebury company keeps a stock of raw materials, Krans said.

For the RV industry to flourish, suppliers, manufacturers and dealers all need to be healthy, said Terry Bodenbender, vice president of sales and marketing at Skyline in Elkhart, Ind. And the manufacturers have a responsibility to help the suppliers stay profitable by, among other things, paying a fair price for the parts.

More than not getting fabric or driver's seats, manufacturers could have an added liability if a supplier goes out of business, Bodenbender said. RV makers may have to cover any individual product warranties when suppliers are gone from the market.

Still, Bodenbender said he does not see any problems arising over the supply issue. About a month before the Louisville show, Skyline started encouraging dealers to place orders and is confident it will be able to have the units its dealers need in time for the retail show season.

Although it did not always equate into revenue, LTM spent a great deal of time in the past year working with manufacturers on changes in products, said Garvey. Talking with clients and knowing their needs beforehand is especially important for the fabric company because most of its products are shipped from overseas and take from two to four months to arrive.

Being out of stock makes the company rush to catch up and sends a customer to a competitor.

Based on its conversations with customers, Crane Composites develops a monthly forecast of what the industry will need, said Kate Stakenas, marketing coordinator. Then, every Monday, managers meet and revise that forecast so Crane will have product when manufacturers call.

"We're watching everything very carefully," Stakenas said.

The company, headquartered in Illinois, supplies laminate sidewalls and roofs to the RV industry from plants in Goshen, Ind., and Jonesboro, Ark.

Like L&W Engineering, Crane has been pressured by manufacturers to provide product more quickly. The company has cut its lead time to eight to 10 days and is expecting the squeeze on suppliers to ease as manufacturers and dealers build inventories.

RV makers have contacted L&W Engineering, worried if the supplier will be able to meet demand, Krans said. Even though manufacturers need components and parts faster than ever, the fabrication company has assured its customers it will be able to provide the products when needed.

"You have to scramble, there's no doubt about it," Krans said, "but we're committed to do whatever it takes to make things happen."


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