Not many of us understood global supply chains in detail before the onset of the COVID-19 pandemic—at least not their vulnerabilities. That has all changed as suppliers have been forced to adapt to shutdowns, labor shortages, and other problems over the last two years. The good news is that in the face of this unprecedented shakeup, we have learned valuable lessons about how to better prepare supply chains moving forward. At DMW&H, we continue to focus on these three areas of improvement when discussing the topic with our clients.
THE ROBOT WITH THE COLD?
The push towards supply-chain automation really comes down to a cost-benefit analysis. Does it make sense for a machine to take the place of a human for a specific task? More and more often the answer to that question is now yes. For many years the push towards automation has been driven by the attributes which autonomous mobile robots and automatic guided vehicles have and people do not. These machines do not need to sleep, or eat, or take breaks. They don’t need health insurance, or workmans comp, or retirement plans, etc. There is also an important feature of machines we may not have paid much attention to before—they don’t get sick. So many of the supply chain issues faced during COVID-19 were caused by human health concerns. Sanitization, testing, work days missed due to illness, quarantine. These were all major factors in the workforce during the pandemic, and importantly, they aren’t issues for machines. As automation becomes more cost-effective, the benefits of similar features will begin to distinguish these machines from human workers more clearly. For example, an automated part of your supply chain may come with a high initial cost, however these machines can be updated through software improvements rather than physical upgrades or new training for workers.
KEEP YOUR OPTIONS OPEN
If you are on a cross-country roadtrip you can stop at any of the thousands and thousands of gas stations that flank highways to fill up along the way. If you were limited to one gas station, your trip wouldn’t last very long. This is a useful analogy when thinking about your supplier base. If your materials or products are provided by a single supplier, or even multiple suppliers from a specific area, you are vulnerable to a bottleneck if any problems arise. As an integrator, DMW&H is uniquely positioned to help you expand your existing supplier base, finding those suppliers that are just the right fit. Not only will diversification strengthen the backbone of your operation, it will also allow for improved efficiency and routing of purchases from multiple sources.
PROXIMITY
In today’s world, customers have a lower tolerance for long shipping times and inflexibility in their ordering. A great way to get around this is to orient your supply chain more locally. While it may make financial sense to source your supplies from larger providers overseas, smaller local hubs can be more adaptable. “Near-shoring” your suppliers is a concept that has grown in popularity as businesses look to shrink the distance and time it takes to ship and receive key materials.