Safeguarding Your Supply Chain

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Date: April 5, 2023

Unforeseen world events such as the pandemic significantly damaged manufacturing companies' standard global supply chains. As a result, erratic disruptions became commonplace as the manufacturing industry struggled to acquire the raw materials needed for daily operations.

map of europe pinned whiteboard

Manufacturing Supply Chain Challenges

Whilst these disruptions can be mitigated through new supply chain management methods, challenges are still emerging due to the continued Russian conflict in Ukraine.

Reduced Supply

The international nature of these issues is inextricably connected to the world politics of current events. For example, critical resources such as metal, oil and chemicals are suffering from reduced production quotas or shutdowns at many manufacturing plants in China. Additionally, economic sanctions against Russia have created lower purchases of goods from there.

Logistical disruptions are still being felt in every area of manufacturing. For example, when metal foundries acquire their goods over international waters, they may encounter unforeseen struggles. In addition, increasing travel costs and delays make budgeting for deadlines challenging, with the automotive, energy and metal sectors being the most affected.

Unpredictably Erratic Logistics

Many manufacturers would develop positive relationships with a few third parties for sourcing their materials, limiting themselves to a few trading partners extended to choosing a single supply chain for order fulfilment. Relying on these limited options was revealed to be fatal to smooth operations once lockdowns and disruptions eliminated those options temporarily.

New logistical plans were needed to meet supply and demand, but with the reliability of all supply chains in question, knowing which to choose became the new challenge for manufacturing companies.

supply yard with shipping containers

Successful Supply Chain Strategies

The fluid motion of international supply chains can easily create disruptive events with unknown timing and effect. The challenge for manufacturers has been to find ways of preparing for these disruptive risks whilst maintaining a consistent level of productivity gains through their various supply chains.

Mitigate the Impact

Managing the various items you require through your chain is a complex affair. By continuing the scope of your chain, you can assess it for increased efficiency and create a higher-performing chain with lower risks. This will result in limited disruptions to just small sections of your chain.

Large foundries with metal injection moulding operations can split their incoming supply chain orders of raw materials to contain the effect of any disruptions. For example, you could assign a decentralised procurement to high-volume items with a low-demand uncertainty. This will be in contrast to low-volume materials with a high-demand uncertainty. Flexibility when planning to source your materials is key to safeguarding your current supply chain.

This can involve many methods depending on the disruption being handled. For example, diversifying your delivery options will provide additional options for transporting your goods and help avoid unexpected closures or delays.

Each business will have its way of approaching this issue relevant to its focus, but one recommended solution is to explore local suppliers. International shipping is still struggling in some areas to recover due to the recent year's global events; however, finding the materials you need may still be possible closer to your facility, and with a shorter distance to travel, there is a decreased likelihood of disruptions.

Open and Honest Discussion

When discussing your daily operations with your clients, being honest and open about the situation is key to managing the current state of supply chains. Not communicating with your client, supplier and freight forwarder will limit your options and create unresolved problems hindering your operations.

Risk can be a complex topic to discuss with business partners. Increased risk can have a negative perception, but ignoring risk will only encourage further disruptions that will harm your business relationships.

man with tablet reading data in warehouse

Developing this cooperative approach has the added benefit of encouraging beneficial business relationships. In addition, discussing the disruptive issues to meet an equitable agreement will encourage an adaptive business model that will be far more successful than more rigid alternatives that will break under the strain of a shaky supply chain.

This honesty needs to be both ways, however. For example, say a client wished to escalate a currently processed order of aluminium casting parts. This change can strain a supply chain, and it may not be possible to fulfil the order entirely within the initial lead time. However, by being honest about the reality of the situation, managers can avoid unwelcome surprises later.

Plan for Disruptions

Developing a risk management strategy is significantly helpful for any manufacturing company using an international supply chain. However, this strategy must be customised to meet your facility’s unique needs.

Effective risk management plans need to be flexible and adaptable. The more elastic the strategy, the less time is lost compensating for an unexpected disruption. Advanced IT systems can be implemented with automated responses to certain situations so manufacturers can react more quickly. For example, delivery progress, demand forecasts, inventory levels and production schedules can all be monitored through wireless computer systems to provide a complete picture of the status of daily operations. With this valuable data, facility managers can make informed decisions about adapting and reinforcing their supply chains.

Investing in such computer systems will help your company compensate for the rapidly fluctuating international supply chain as everyone in the manufacturing industry finally waits for it to settle. One example we’ve had success with is dual sourcing our required materials. By planning to source from multiple businesses, you provide increased options and limit unexpected disruptions.

Dean Group is a leading investment casting foundry in the UK, able to provide the highest quality manufacturing services to a broad range of companies thanks to our effective supply chain management and innovative operational methods.

 

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