How to Reserve and Forecast Allocation with New Source Corporation

Demand for aluminum aerospace extrusions hit such a high-level last year that mills were forced to reevaluate their customer base and consolidate service to a smaller range of companies–one of which is New Source Corporation.

“As a result, materials that once had lead times of 60 to 80 weeks have stabilized to much lower,” said Jamie Barron, Vice President of New Source Corporation. In this year alone, some of those lead times have reduced from 50 weeks to as low as 28 weeks or even 16 weeks for larger parts.

“Mills looked at their capacity and allocated what they were able to produce to their top direct customers and distributors. By honoring pre-existing contracts, we have an allocation each week to have parts produced with our manufacturing partners.”

“That allocation is great for us because it gives us guaranteed shipping. We can exercise our negotiated pricing agreement and maximize their production time by committing to large volume purchases.”

Overcoming aerospace supply chain challenges

Forecasting allocation is increasingly important because some would struggle to meet minimum production and allocation requirements. By partnering with a distributor like New Source Corporation, customers benefit by not having to meet those minimums as they can purchase off the shelf. Mills have trimmed their customer lists because demand has surged in recent years as aerospace companies have competed for supplies among themselves as well as with automotive manufacturers and construction companies.

Meanwhile, demand planning has become harder for aerospace companies as lead times stretched from a few months into almost two years–topping more than 90 weeks in some cases. Fortunately, New Source Corporation has been able to help companies overcome supply chain challenges by communicating with its customers often and informing them of the latest market changes and how they impact their orders.

“Customers can plan better, reduce costs and improve cash flow by working with a distributor like us instead of going directly to the mills. Instead of paying for the full mill run upfront, we make the investment for them,” Barron said.

New Source Corporation also provides customers with the right parts at the right time and the right price by shipping parts exactly when they are needed through its vendor-managed inventory services. Customers can purchase for a large contract spanning several years and New Source Corporation will house the materials then package and ship them as they are needed.

Ordering aerospace aluminum extrusions

As of the end of May, New Source Corporation has lined up new orders to ship as far ahead as 2029, for example. “The sooner orders can be placed, the better that customers can reserve their material,” Barron said, “Reserving production capacity in advance is imperative given New Source Corporation’s weekly allocation with our manufacturing partners.”

“Also, in getting their orders to us as soon as they can, we can hold firm, fixed-pricing for up to several years. Many suppliers don’t offer that now and it adds a lot of value for customers, especially in an unstable market,” Barron said.

New Source Corporation orders parts to maintain its extensive inventory of aerospace aluminum extrusions as well. This lets the company quickly fill orders for its customers, including for unscheduled repairs or AOG services.

“We stock thousands of items and make sure we have ample allocations for our regular stock buys,” said Stephanie Barron, New Source Corporation’s Marketing Director and Customer Relations Manager. “If customers can give us an accurate need date for their materials when ordering, we can plan better.”

In working closely with customers, New Source Corporation helps them get the right materials, at the right price at the right time.

contact us today to learn how we can help you with aerospace aluminum extrusions.

June 13, 2024

Stay updated

Want to get the latest Industry Articles straight to your inbox? Subscribe to our monthly newsletter.


We’re here to help you find what you need. Contact us with any questions or to request a quote.