The COVID-19 pandemic crippled the global supply chain delaying critical medical supplies, and even your favorite toilet paper. But Accumold was relatively unaffected, escaping the fate so many other companies suffered from. This wasn’t by accident, and we’re eager to share the decisions we made years ago to help you prevent supply chain disruption.
Many high tech companies, OEMs, and medical companies depend on us for critical components. Because of this, we constantly look for ways to insulate ourselves from anything that could prevent 100% uptime. Our micro mold facility is even rated to withstand major weather events, and we’ve refined our supply chain as much as possible. To prevent supply chain disruption, we keep our chain as simple as possible. Fewer links in our chain, translate to fewer points of failure.
The Challenge Of A Global Supply Chain
There is no simple answer why a virus was able to bring the global supply chain to its knees, but there were two major factors in this case. First, various countries responded to the virus in ways that disrupted communication. And second, shipping availability became unavailable. Understanding how both of these work will help you prevent supply chain disruption the next time we have a recession, pandemic, or major event.
Many companies rely on items manufactured in countries outside their own. For example 98% of personal protective equipment (PPE) comes from Asia. Typically this isn’t a problem but during the pandemic, however, some foreign governments shut down businesses to curb the virus. Sadly, some actions included shutting down all communications within their borders. Shutting down communication halts your supply chain overnight.
The other major issue was shipping availability. Shipping via ocean requires very large orders to acquire container space. That can be a challenge for companies that constantly order different types of resin in smaller quantities.
Air is a great option, but during the pandemic, the availability of space disappeared in a matter of days because import/export companies, and even commercial shipping companies like UPS, DHL and FedEx, heavily utilize commercial airlines to carry cargo.
You probably remember when airlines started charging for bags. This is because they could make more revenue shipping freight than letting you carry extra bags. But when everyone stopped flying, that space disappeared. Only now are airlines catching up by removing passenger seats.
How To Insulate Your Company From Supply Chain Disruption
Our company made the decision years ago to source critical supplies from companies closer to our facility. This reduces supply chain risk in the event of a disaster. Obviously, we still do a large amount of business with overseas and distant partners, therefore our risk mitigation plan goes farther than just keeping local providers.
This might mean we have second sources for the critical resins or items we buy. In specialty cases, where the product or service we receive is unique or limited, we employ other mitigation efforts like safety-stock or consignment. Our risk mitigation serves to protect us from even local vendors that may go offline in the event a hurricane, natural disaster or any other crisis.
Speaking specifically of micro molding material we use, of the thousands of variations we use at any given time, over 95% of our products are made by local companies not requiring overseas shipping. To prevent supply chain disruption, we have accurately anticipated failure points in our own supply chain.
When we source from regional companies, it is true companies in the USA can be more costly, but in our view, the additional cost ends up being a wash in these cases. The domestic providers we utilize allow us easier control over quality, and we protect against import restrictions, or delays in shipping. This helps keep us profitable.
Your company should be working to find trustworthy suppliers, and putting in place mitigation efforts in the event of natural disasters or a disrupted supply chain. Local isn’t always the best option, so in some cases that may mean planning redundancies. It’s not fun, but you must commit to a plan today. Challenges won’t stop, but your preparedness means those challenges don’t have to stop you.
Tom Murphy has been a certified professional in supply management since 2014 and holds a BA from Buena Vista University. He consults with major resin suppliers to test experimental materials pre-commercialization to ensure effectiveness in micro applications.