Business

Supply chain bottlenecks help manufacturers of this boat, motorcycle and ATV make factory decisions

Sports vehicle manufacturers, like other manufacturers suffering from volatile supply chains

Polaris Co., Ltd.

PII -0.40%

We decide what to produce based on the parts we have.

Polaris is changing its manufacturing and sales strategies on the fly to address material and component shortages and unreliable global transportation systems. Confused the exact production plan..

The company said it has adjusted the supply chain constraints for all-terrain vehicles, motorcycles, snowmobiles, boats and off-road utility vehicles by around 30. Polaris may change its plans daily for what it produces. The company has been switching models for some time as supply and logistics managers are looking for parts and materials for other models that they cannot build.

Polaris shift supervisors will report during a production meeting at the company’s manufacturing and assembly plant in Roseau, Minnesota.

For example, if there are not enough seats in the supply pipeline to produce a four-seater version of the utility terrain vehicle due to a lack of Styrofoam padding, Polaris will turn production into a two-seater or three-seater model. Shift As more seats become available, the factory will either return to the four-seat model or add missing seats to the already assembled vehicle.

Kenneth Poussel, head of operations for the company, based in Medina, Minnesota, said:

Companies have spent decades adjusting their supply chains to provide enough components and materials to meet production schedules to reduce the cost of storing parts.Manufacturers have no backup inventory of parts Some large suppliers were unable to deliver on time.

Tight markets usually offer some companies the opportunity to attract customers from their competitors. However, retailers say it’s difficult for everyone to capitalize because of widespread supply chain disruptions, transportation bottlenecks, and manufacturers’ labor shortages. Polaris dealers were sold out and the company was unable to replenish them at normal levels. Instead, the customer is currently depositing an order sent to the factory.

Polaris shipped the snowmobile to a dealer without shock absorbers and had the dealer install it later when supply was restored.

Chris Watts, owner of an American motorsports dealer in Nashville, Tennessee, said he sells Polaris and other brands. However, his inventory of those brands is almost exhausted. “Customers buy whatever they can get,” Watts said.

Like many manufacturers, Polaris experienced an unexpected surge in sales during the Covid-19 pandemic. With the closure of restaurants, cinemas and fitness centers, consumers shifted their spending to boats, motorcycles, all-terrain vehicles and other outdoor vehicles. Polaris retail sales in North America last year increased 25% from 2019 and increased 70% in the first quarter from last year.

Polaris, which had $ 7 billion in sales last year, has the top share of off-road vehicles, accounting for about 40% of the North American market, according to industry analysts.

Prior to the pandemic, Polaris was able to increase orders to parts suppliers as needed. But this time, the supplier’s reaction was sluggish. Inventories have been exhausted after the factory was closed for a week last spring to slow the spread of the Covid-19 virus. To make matters worse, the sea harbor was clogged. An unusual winter storm that hit Texas February and A ship blocking the Suez Canal It delayed a ship carrying shipping containers loaded with Polaris parts and products from Asia.

Polaris said it has devised a workaround to ease its reliance on the most difficult components, including: Semiconductor chip Used in vehicle gauges. The company said engineers redesigned the gauge on the fly to work with a variety of chipsets that were more easily available than the chips the company was using.

when Supply of foam for tightened seats After a storm in Texas in February, Polaris built seatless vehicles for weeks and later installed them when resin was available again to make plastic foam.

Approximately one-third of the vehicles leaving the company’s assembly line are held back until the missing parts arrive, the company said. That’s about twice as much as a new car that usually needs to be reworked.

Indie-style snowmobiles are on display in the lobby of the Roseau factory, with snowmobiles and ATVs awaiting outdoor shipments.

The availability of shock absorbers was particularly volatile. When the snowmobile shock disappeared during the fall production season, Polaris shipped some snowmobiles to the dealer without the snowmobile and later sent a shock for the dealer to install.

“It wasn’t efficient from a cost perspective, but it took time,” said CEO Michael Speetzen.

The production manager at the Roseau, Minnesota plant switched to a two-seat variation of a four-wheeled motorcycle instead of using different but available suspension components, resulting in a single-seat all-terrain vehicle shock absorber at the end of last year. Very short of. The factory’s production line, which welded metal frames and manufactured plastic moldings for ATVs, was reset overnight so that production of the two-seater model could begin the next morning.

“You pivot away from lack of parts. Our team is good at building what we can do,” Pucel said.

Pucel says that at least 10% of the company’s suppliers have been under stress since the pandemic, often to get enough material from their suppliers or to buy additional equipment to increase production. He said he was having a hard time figuring out the money he needed. He said that if Polaris hadn’t screened unprofitable companies from its supplier base a few years before the pandemic, the number of suppliers struggling would be even higher.

Workers assemble the shock and control arm on the factory’s ATV assembly line.

Polaris has intervened to purchase equipment and materials for some suppliers in exchange for price cuts.when Plastic resin production in Texas stopped due to a February storm, Polaris has allocated some of its resin to its suppliers.

Polaris is expanding its Monterrey plant in Mexico to assemble some of its most popular utility terrain vehicles in anticipation of growing demand. The company increased boat production at its Elkhart, Indiana plant and reopened another plant in Syracuse, Indiana. Over the past year, we have hired about 1,000 employees, an increase of 7%.

Equipment maintenance and rush work to readjust the assembly line to produce different models is often done at night or on weekends. The production turmoil and social distance procedures at the factory by Covid-19 were tough for employees.

“The whole organization is very cautious,” said CEO Speetzen. “That’s one of the things I’m worried about.”

Workers check ATV parts made on an injection molding machine at the Polaris plant.

Write to Bob Tita robert.tita@wsj.com

Copyright © 2020 DowJones & Company, Inc. all rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Supply chain bottlenecks help manufacturers of this boat, motorcycle and ATV make factory decisions

Source link Supply chain bottlenecks help manufacturers of this boat, motorcycle and ATV make factory decisions

Back to top button