Posted 16 October 2012
Q: The recent rise in copper price has had a large impact on the cable industry, how has it affected the purchasing department?
While it has risen over the last 12 months, it does appear to have stabilised recently. We were hardest hit in May 2006 when the price rose by around 50% in a 6 week period. We are taking a longer term view on copper and realise that the price will bounce around over the next 12 months or so. We are putting a great deal of emphasis on maintaining good stock levels to minimise the effect on our customers.
Q: What effect has the current state of the market had on lead times?
We are definitely seeing an increase in lead times at the moment due to the ever decreasing number of production facilities within Europe. This is a challenge we are facing but we are working with our suppliers to find ways to make them reflect customer needs.
Q: What are lead times running at now?
On simple cables, there has been a shift from around 6 weeks to between 8 – 9 weeks. On more complicated cables, seeing lead times of between 16 – 18 weeks is not uncommon. Some heavy power cables and medium/high voltage cables are at between 30 – 40 weeks. Lead sheathed cables are currently running at up to a year.
Q: You mentioned that there have been closures in cabling factories recently?
Yes that’s right. I heard a statistic recently that in a 10 year period, something like 80% of UK cable production has ceased. BICC was of course the biggest casualty, as well as numerous other smaller cutbacks.
Q: What impact has this had?
A lot of production has been moved to the Far East, particularly on more complicated cables where the better factories are able to produce a top quality product. However this has left a huge vacuum for fast deliveries on short runs.
Q: What are the biggest problems you face in purchasing?
The biggest problem we face is unreliability of delivery dates from our suppliers. It can be incredibly frustrating to be let down in this way, as we pride ourselves on our service and delivery. We put great emphasis on this, and we need the same from our suppliers.
Q: What are you doing about this?
We are constantly working to increase our stocks to try and insulate the customers better from the poor service provided from these factories. In this way we take a pro-active approach to managing our supply chain and minimise disruption to our customers. Regrettably, some factories have unique production facilities or expertise so placing the business elsewhere is not an option.
Q: How do you maintain the quality requirements FS Cables sets?
We have comprehensive specifications against which pre-production samples can be checked. ISO 9001 also plays a big part in both assessing and monitoring suppliers. We also regularly visit the factories to ensure we both understand and appreciate the other party’s needs. Our relationship with suppliers and customers are blending into partnerships – ultimately we all rely on each other.