Originally published in Military Embedded Systems
By David Kiesling
In today’s unusually challenging environment, companies may need to look for workarounds to stay on track regarding supply chain and delivery. Some electronics companies are learning the hard way that supply-chain resilience is a critical qualification for doing business, whether in their own or in their business partners’ and suppliers’ operations. These lessons will change the way organizations consider procurement and production decisions for the future.
Every business – including those that supply the military-electronics arena – is feeling the pain of supply-chain problems these days. Many, in fact, are finding it impossible to run efficiently, meet demand, and deliver on time when necessary parts and materials are stuck in limbo.
The current tight supply-chain situation is having a painful impact on many companies, slowing production as parts, materials, and labor become scarce. Whether you are waiting on products or services like installation and repair, deadline slippage is beyond frustrating. The delays can kill your revenue, cause you to lose loyal customers and new business, and damage your business relationships.
Planning for the long term might sound a bit ambitious when the more immediate problem is that today’s orders are stalled, so let’s start by discussing survival strategies for the current logjam.
Decide first if your current suppliers can meet your immediate needs. Can you wait? If delays are seriously impacting your business, consider all your options. Not all products or suppliers are equally prepared to operate through a supply-chain crisis like this. Those with the lowest incidence of backlogs right now either laid the groundwork for resilience before 2020, or they pivoted quickly to prioritize supply-chain agility as the going got tough. The most successful probably did both.
Look around for alternate suppliers if you need to. You can minimize delays by working with the companies that can support your short-term needs more quickly than your existing partners can accommodate.
If you’re lucky enough to be getting what you need, when you need it, from your existing suppliers – consider placing or confirming orders and inventories as early as you can. That way, you won’t get left behind or caught short.
These challenges will light the way for successful organizations to prioritize resilience to grow and prosper in the future. How can you be better prepared for tomorrow, next month, next year? Survive the present, of course; protect your relationships and reputation as best you can, using the mitigation tactics discussed above. While you’re at it, consider long-term changes that will better position your company for whatever lies ahead.
Find partners with multiple production facilities worldwide; they can often move your work to areas where bottlenecks are less severe so that changing global challenges don’t shut off your supply. Different regions of the world are feeling COVID-19 impacts and shipping snafus at different times, so redundant geographic capabilities can alleviate regional pressures.
For example: Over the past few years, Times Microwave Systems strategically managed growth, preparing for a situation such as this by opening new manufacturing and warehousing facilities in China, India, and Europe. Moving production closer to customers allowed for shorter delivery routes and created more options for mitigating shifting labor and supply-chain issues. When difficulties arose, it was possible to maintain a steady inventory and supply of the products and services customers relied on.
Decentralized manufacturing capabilities enabled uninterrupted production throughout the pandemic, building inventory needed to meet immediate demand. By continually increasing on-hand stock for standard materials across internal and distributor-serviced warehouses, companies that prepared this way are now better-suited to weather the volatility in raw material costs, thereby resulting in more stable pricing for customers.
Flexibility and versatility should also be considered in business and supplier relationships. A company that offers custom solutions can work with you to develop the most feasible systems at the time. You can thus avoid getting locked into a one-size-fits-all system design that depends upon one source, one material, or one standard product that could be in short supply when you actually need it.
Make sure you are buying genuine products from a reputable company to ensure your system works as it should. Shortages tend to bring counterfeits, fakes, and clones out of the woodwork, as unscrupulous operators look for ways to cash in on a crisis. The performance of your customers’ products depends on reliable product sourcing. Customers that unwittingly buy inferior products sold under false pretenses often pay the price with dismal system performance.
Do whatever you have to do to get through this crisis. Be flexible. Build resilience for the future. Work with organizations that are working through the current issues with minimal disruptions. And adjust your approach to qualifying the companies you work with so that you’ll be ready for the next uncertainty.
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