[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”]How to reduce supply chain breakdowns in Manufacturing[/mk_fancy_title]
[mk_divider style=”thick_solid” divider_width=”one_half” border_color=”#206f98″ margin_top=”10″ margin_bottom=”40″]

In the previous article, we looked into the problems companies face when supply chains breakdown from a number of factors. Understanding the problems of supply chain breakdowns paves the way to preventing them from occurring from the offset. If you haven’t already read this article, it’s never too late, simply click here. Within this post, we look at ways to prevent or prepare for supply chain disruptions which will minimise damage done to a business.

[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]

There are many ways a company can prepare when there is a risk of supply chain breakdowns occurring within their organisation. A company can simply hold cash reserves and in most instances, top manufacturers hold supply-chain reserves. These include inventory, excess capacity and redundant suppliers.

[mk_image src=”http://www.excellmetalspinning.com/wp-content/uploads/2017/04/image-1-1.png” image_width=”800″ image_height=”350″ crop=”true” lightbox=”false” frame_style=”simple” target=”_self” caption_location=”inside-image” align=”left” margin_bottom=”40″]

[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]

Companies prepare for delays by appropriately and economically placing and sizing their capacity and inventory reserves. They do this by maintaining flexible capacity in existing factories. In addition, they would also train team leaders on multiple work stations further avoiding the need to employ specific work roles and preventing future delays. Especially if workers have to be absent for any given reason.

Further Delays can be prevented by balancing capacity and inventory (depending on costs). Supplier delay risks and inventory costs can be reduced by holding lower value, high demand products as well as having capacity to assemble high value products.

Finally, combining inventory with different transport modes can prevent delays. High value products should sometimes be transported by air whilst lower value products should be shipped at low cost.

[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]

Disruptions in a supply chain can cost businesses thousands if not handled correctly. But there are ways to prevent and/or prepare for them.
Building inventory can counter disruptions in material flow. However, holding inventory can be costly since it would only be used in the rare case of disruptions. As a result, holding reserves builds up costs within a company. Therefore, this preventive action should only be used in the confidence that disruptions are likely to occur within the supply chain. On the account of a disruption occurring however, costs would be minimised resulting in less damage to the business financially.

[mk_padding_divider size=”40″]

[mk_image src=”http://www.excellmetalspinning.com/wp-content/uploads/2017/04/image-2-1.png” image_width=”800″ image_height=”350″ crop=”true” lightbox=”false” frame_style=”simple” target=”_self” caption_location=”inside-image” align=”left” margin_bottom=”40″]

Another strategy used, and one more opted for by manufacturers, is to use redundant suppliers. This is most effective for products with high holding costs and/or a high rate of obsolescence. By using multiple suppliers for components, a company can prepare for disruptions without building up fast-depreciating inventory. Furthermore, some companies preserve economies of scale by sourcing low volume products with a single supplier and multiple suppliers for high volume products.
With these methods put into place, damage will be significantly reduced when supply chains undergo delays and disruptions, or are at risk of one.