History
We have been trading with other continents for centuries. China has taken an increasingly important place there. Over the past 30 years, China has developed into the world’s factory. Now this production engine has stopped due to corona. We are now seeing more and more shortages among our customers, causing production to stop. China is now starting up, but the first reports show that there are shortages of materials and labour, because the Chinese are only allowed to travel limited (workers often come from the inland).
Current situation
Currently, not only problems arise with parts from China; Italy and Spain are also largely still. Production is no longer allowed in India. Globalization has made us very dependent! The shortages threaten the output of our processes and can cause your factory to shut down and your products not to be delivered.
Practical examples
- Customer specific 19” racks for servers are no longer supplied from China because the factory has not yet started up. Result: failure to deliver approximately 3M € turnover. We had the racks produced in the Netherlands with a #supplychallenge. The racks were slightly more expensive but the benefits were enormous: smaller series, shorter lead times and better quality.
- Cable assemblies from Italy are no longer supplied. Fast action at local producer and the machine can be delivered again.
- Complex casting / milling part for machine maintenance is not supplied from China. Solution: locally 3-D printed and then mill.
Organization
This requires speed in your organization; so small teams for creative solutions! Obviously, the focus here should be on time and solution and not on the cost of the part. Of course, having a large local and international network also helps. In our #supplywebinars https://topinc.nl/supply-webinars/ we explain how we approach this adequately.
Gil Heijmans
