With the right tools it’s possible to verify the quality of materials, suppliers and the final product.
So you want to optimize your manufacturing processes. There are a number of ways to go about it. With so many options in getting started, how do you know which direction to head first?
One way is to trace the flow of materials into your plant. In other words, start with your supply chain. The supply chain has gotten a lot of attention lately with the global reverberations of the COVID-19 pandemic.
Monitoring supplier quality is a top concern since the road to good quality begins with good materials, and keeping this flow of materials uninterrupted. Obviously with worldwide supply chain issues, this is an especially timely concern.
Supply chain issues may be top of mind for many manufacturers right now, but these issues are nothing new. While the pandemic caught many manufacturers off-guard, it’s not the first time supply chains have been disrupted by outside events.
Consider the effects of flooding in Thailand in 2011. As the BBC reported, “Factories and supply chains are facing disruption as some of the worst flooding in decades starts to affect Thailand's economy. Western Digital, Honda Motor and many other companies have been forced to suspend production in central Thailand because of the floods. Most of the factory closures are due to disruptions to local supply chains.”
Looking back further, you may recall the potentially catastrophic Toyota Aisin fire of 1997.
MIT’s Sloan Management Review explains, “At 4:18 a.m. on Saturday, February 1, 1997, a fire erupted in Aisin’s Kariya plant number one. By 8:52 a.m., the lines dedicated to P-valves and to two other brake-related parts (clutch master cylinders and tandem master cylinders) were almost completely destroyed, along with special-purpose machinery and drills that could take months to reorder. The near destruction of the P-valve lines was potentially disastrous for Toyota; nearly all of its vehicles used Aisin P-valves manufactured exclusively at the Kariya plant, which turned out 32,500 P-valves a day for Toyota.”
Amazingly, the company weathered this crisis in a matter of days: “By Monday, February 10, a little more than one week after the plant fire, all Toyota-group assembly plants were back to normal with production volumes of 13,000 to 14,000 vehicles per day.”
It sounds like a miracle, but it was really a matter of finding alternate production sites, a task that built on decades of supplier management and cultivation. Though the fire was disastrous, the company responded in textbook fashion for how to deal with a supply chain crisis.
Of course, supply chain disruptions can happen anywhere, and domestic supply chains are not immune to disruptions. Just because your sourcing occurs close to home doesn’t mean you are invincible. Earthquakes, hurricanes, fires, and floods could also wreak havoc with your supply chain, and that’s just the natural disasters.
Lately manufacturers have been made more aware of these challenges, particularly because they’ve been living them this year.
According to an article in Forbes, a recent survey found that digital transformation was a strong area of opportunity for manufacturers. And no surprise, supply chain was right behind it.
“Respondents ranked supply chain resilience as the second most important opportunity driver. And we believe they are right on. Rather than viewing the cost of goods as a drag on margin, the cost of the supply chain should take the spotlight,” writes Dave Evans. “It is a simple economic model: Because demand and logistics are down, the cost of goods is up and margins are down. But the real cost comes when the opportunity cost is considered. If you cannot make the product because a critical material or component is impossible to source, you’ll be severely hindered from delivering the end product. Indeed, the impact is measured in the inability to sell the product over time – not in the lost margin due to the higher cost of goods. Time is money in manufacturing and the supply chain is the clock.”
It’s time to examine the supply chain. Going about sourcing materials without any acknowledgement of the recent effects of the pandemic would seem to be the ostrich approach to business decision-making. Sticking your head in the sand will not make these issues go away. And the next time supply chain issues surface, wouldn’t you like to be better prepared?
Better insight into your supply chain does not just prove useful during a crisis, however. Wouldn’t it be best for your organization to constantly be aware of any supply chain issues, no matter how much it seemed like business as usual?
Rather than wait for the next crisis—and let’s hope there won’t be another memorable one for a good long time—start planning your response now. Take a closer look at your materials, tools and suppliers, and know that you’re as prepared as you can be for whatever Mother Nature throws at us next.
Supporting manufacturing optimization is a lofty goal. But it’s also an entirely possible one.