Tips for Supply Chain Solutions in Uncertain Times
Communicating early, researching, providing alternatives, and looking for new distribution options can help system integrators keep client’s projects on track and minimize supply chain issues.
The last year and a half, without a doubt, brought forward some of the biggest challenges, obstacles, and adjustments some of us have ever faced. Questions we never considered asking had to be answered in a matter of days. How do we recruit, hire, train, and deploy new engineering talent without potentially ever seeing them in person? How do we meet client needs if we are in a state of lockdown? How do we protect the health and safety of our employees and their families? One question that a lot of us had been asking that felt like it only became more prudent, was “How do we deal with longer than normal lead times”?
Prior to the pandemic, supply chain woes were nothing new. As new tariffs were created and refined, the impact on our supply chain was near immediate. In some cases, delays were minimal but came with surcharges on products that worked their way from supplier, through multiple distributors, and finally the end user. In other cases, normal lead times had four to six weeks of additional time added to shipments coming from overseas. Although these shifts caused annoyance, they were predictable. They could be accounted for, and project schedules could be shifted around to keep the project on track. This was largely because the changes were mostly on the logistics/customs side of things.
The pandemic brought a set of issues to the supply chain world that were not predictable and could not be accounted for. Shipping aggregation companies became overwhelmed as they operated with severely decreased staffing levels. Critical part shortages compounded the problem even more. Shipping delays as people ordered more stuff for delivery elevated the issue. Four to six week delays became 12-16 weeks and beyond. We currently have some equipment and hardware for projects that have 40-50 week lead times. This comes at a time when demand for System Integration services seems to be at a unique high after eight months of project delays for the pandemic. Clients want their projects done, and they want them done now.
Typically, four to six week delays can be absorbed in larger project schedules by front loading certain activities and delaying others, but several dozen week delays require a different approach entirely. To combat these delays, we’ve been implementing three main strategies to minimize supply chain issues in our projects.
Confirm requirements and alternatives
It is important to confirm project requirements for hardware and equipment to see if there is any leeway for providing alternatives that meet requirements but lower lead times. When stainless steel had longer than normal lead times, we made sure to confirm if that was a requirement for control panels based on the environment, or alternatives could be used for panels that still met the project specific environmental ratings. In cases where specific components were the issue, such as a sensor, we would offer functionally equivalent alternatives for consideration as well as an update on if/how it would affect integration.
Consider options in your supply chain
Limited distribution models (LDM) aside, there are usually a wide variety of distributors and vendor representatives that can be used to procure items for client projects. However, as relationships are built and orders repeated, that list gets narrowed down to a set of frequently used companies that management or the engineering team are comfortable with. As online shopping becomes more of the norm, we found our newer engineers getting creative with sourcing options which decreased lead times significantly on many projects. This often comes with an increase in time to source and track the orders, but to many of our clients, decreasing lead times by high double-digit percentages made it an easy choice. If the parts with long lead times aren’t under an LDM, consider seeking out distributors inside and outside your area for their lead times and stock capabilities.
Communicate, communicate, communicate
In attempt to get ahead of this issue, we have shifted our project approach to identify long lead time and at-risk items at the beginning of a project to begin the alternative product and sourcing process. We also explain to clients at the beginning we are likely to run into issues and keep in constant contact as the supply chain landscape changes. Although bad news early isn’t always good news, it is at the very least valuable news.
By communicating early, researching, and providing alternatives and looking for new distribution options we can help keep our client’s projects on track and minimize supply chain issues.
Source: www.automationworld.com, 05/10/2021, written by Will Aja. He is VP of Customer Operations at Panacea Technologiesand a certified member of the Control System Integrators Association (CSIA).
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