Last month in this column, I wrote down how we can all fix supply chain issues in time for the holidays. Organizations have been sailing and learning how to manage this for years, especially the last two years. Stories offer many lessons in creativity.
Last week I attended Weber State University’s weekly Noorda Engineering, Applied Science & Technology new building construction meeting. A discussion ensued about a shower faucet. The unavailability of this valve had become a point of friction. The solution seemed simple: find another value. But, even this simple solution had layers. The valve needed the approval of the state, the university and the architects. The valve had to meet specifications.
With everyone at this meeting on board, it took another two weeks to make this change. Fortunately, the new valve had a short delivery time – the time between ordering and delivery. The change made sense: the delay was more expensive than the change.
On the other hand, long delivery times mean that the storage of materials has become critical, even on site. Part of the construction project will store 14 pallets of cables for later use in the project. Lots of insulation panels are resting on the roof because months ago the availability of insulation seemed questionable. These panels expect some metal washer. If the wait becomes long enough, specifying an alternative to the washer, or even finding a local producer, may be necessary. The paint became difficult to find, especially the black pigment. A subcontractor started stockpiling paint up to the supplier’s 100 gallons per week limit several months ago in anticipation of the slowdown.
Any large and complex project, any large and complex organization, has many elements. Organizations can do more than just store. Sometimes the government can play a positive role. Roads, bridges, railways, all of which benefit the movement of goods, will benefit from the new federal infrastructure bill.
Yet sometimes government entities can disagree. Probably, you will find the devil in the details and visible only during a crisis. Take in the many ships that wait outside the Port of Los Angeles. First, a White House request to go to work 24 hours a day helped get things going. Then, in what one reporter said “could be the tweet storm that saves Christmas,” logistics manager Ryan Petersen noted another problem: The port was only stacking two containers high. It turns out that a zoning by-law passed to protect residents’ sight had slowed things down. Under pressure from the president and governor, the city manager temporarily lifted the restriction to allow five highs to be stacked and thereafter things moved more quickly.
Meanwhile, a number of nimble companies that manufacture in the United States have benefited from the slowdown in shipments. Faced with tariffs and delayed components from abroad, companies sourced locally from other companies or from within their own company. Sometimes new services or products are created. During a recent tour of Lifetime Products, I was told how the company became a supplier of metal and tubing due to its investment in tooling.
Electronics has become a hindrance to navigation, and some have done it better than others. Traditional automakers have run into the limitations of computer chips, but Apple, heavily dependent on chips, is not seeing a 50% drop in production, closer to 3%. As a technology company, it has a long tradition of adapting to varying chip availability. Tesla also showed how much more like a tech company it was by programming chips it could acquire instead of waiting for the chips it used for the Model 3. T3 Motion, an ambulance company, simplified it. the design of its vehicles, going from five to one. printed circuit board.
Some companies, like Toro, Whirlpool, and Alliance Laundry Systems, have simply returned some products to older pre-chip designs, despite the additional cost of production. A “classic grandma’s washer” is how Alliance Laundry recently described their simpler Speed Queen washer. Some companies, like Polaris, shipped products without electronics and promised to install them later.
Dell and HP have switched production from desktops to laptops to allow more work from home. Nike bought a predictive analytics company to better manage inventory of everything from raw materials to finished goods. Many organizations have triumphed.
But the future does not escape supply chain management. A recent McKinsey report predicts a supply chain disruption every three to four years. My college will see that when we move into this new building next year. Among other things, all the extra grain Americans have eaten since the winter of 2020 has limited cardboard supplies for moving boxes. I have started stocking all the reasonably sized boxes I can find.
Dr. David Ferro is the Dean of the College of Engineering, Applied Science & Technology at Weber State University: Twitter David Ferro9