[mk_fancy_title tag_name=”h1″ style=”false” color=”#393836″ size=”28″ font_weight=”300″ margin_top=”20″ margin_bottom=”10″ font_style=”normal” txt_transform=”uppercase” font_family=”none” align=”center”]Problems in supply chain breakdowns in manufacturing [/mk_fancy_title]

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From natural disasters to CNC faults, we take a look at the problems manufacturers face as a result of supply chain breakdowns. In order for businesses to avoid risk, a thorough understanding is required.

[mk_fancy_title tag_name=”h3″ style=”false” color=”#393836″ size=”24″ font_weight=”300″ margin_top=”20″ margin_bottom=”10″ font_style=”normal” txt_transform=”uppercase” font_family=”none” align=”left”]Risks [/mk_fancy_title]

Risks are often difficult to avoid and are usually caused by interconnected individuals. This is partly due to actions making situations worse. For example, reducing capacity decreases over forecasting, however, it increases the impact of supply chain disruption. On the other hand, actions taken by one company in the supply chain can increase risk for other participating companies and so on.

[mk_image src=”http://www.excellmetalspinning.com/wp-content/uploads/2017/04/image-1.png” image_width=”600″ image_height=”600″ crop=”true” lightbox=”false” frame_style=”simple” target=”_self” caption_location=”inside-image” align=”left” margin_bottom=”10″]

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[mk_fancy_title tag_name=”h3″ style=”false” color=”#393836″ size=”24″ font_weight=”300″ margin_top=”20″ margin_bottom=”10″ font_style=”normal” txt_transform=”uppercase” font_family=”none” align=”left”]The different risks [/mk_fancy_title]

Major problems can result from minor risks causing a change in flow due to delays and disruptions. These vary from short to long term, frequent and infrequent. Furthermore, simple delays can be minor problems, but a supplier holding up supply can be a huge problem. However, there are ways to avoid risks becoming big problems.

Many companies produce plans (see previous blog post ‘5 ways to reduce manufacturing downtime’) to protect against recurrent, low impact risks. An example of which includes rejects due to bad quality perceived as a low risk, whereas an earthquake is a huge one.

Many large manufacturers resolve these problems by holding reserved. These include;

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• Excess inventory
• Excess capacity
• Redundant suppliers

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Risk mitigation is also another method adopted by companies to avoid risk. This involves intelligently positioning and sizing supply chain reserves without decreasing profits. However, if undisciplined, reserves can drive up costs and hurt the bottom line. Managers must therefore attain the highest achieving profits for varying levels of the supply chain. Success thus requires a good understanding of supply chain risks and remedies, both broad and tailored to the manager’s own company

[mk_fancy_title tag_name=”h3″ style=”false” color=”#393836″ size=”24″ font_weight=”300″ margin_top=”20″ margin_bottom=”10″ font_style=”normal” txt_transform=”uppercase” font_family=”none” align=”left”]Delays [/mk_fancy_title]

Delays often happen when suppliers cannot respond to changes in demand. On the other hand, delays could be a direct result of poor quality, high levels of inspection during border crossings or changing transportation methods. If delays are frequent, a mitigation strategy based on past information can help. In addition, it can help organisations avoid delays altogether. One way it can help do this is by simply having excess flexible capacity within the supply chain.

[mk_image src=”http://www.excellmetalspinning.com/wp-content/uploads/2017/04/image-2.png” image_width=”600″ image_height=”600″ crop=”true” lightbox=”false” frame_style=”simple” target=”_self” caption_location=”inside-image” align=”left” margin_bottom=”10″]

[mk_fancy_title tag_name=”h3″ style=”false” color=”#393836″ size=”24″ font_weight=”300″ margin_top=”20″ margin_bottom=”10″ font_style=”normal” txt_transform=”uppercase” font_family=”none” align=”left”]Disruptions [/mk_fancy_title]

Finally, disruptions occur to material flows anywhere in the supply chain. These are unpredictable and rare but damaging nonetheless. For example, a natural disaster such as an Earthquake or a Hurricane. Labour strikes, fires and terrorism have all been known to have halted the flow of materials. A recent example occurred in one of Audi’s factories that suffered from a fire. In turn, it has led to a parts shortage halting the production of Audi A4s and A5s.