To say the world is experiencing supply chain challenges is a vast understatement. From shortages to delays, the world is struggling on all sides of the supply chain. Is there any way to create a positive impact? According to Sarah Scudder from Source Day in Texas, creating efficiencies at the start of the supply chain can help with problems that can occur at the end of it for manufacturers. She was the host of a recent chat for USA Manufacturing Hour on Twitter and shared some insights with participants.
Real Time Visibility
The discussion began with how the lack of real-time visibility and uncertainty during shipping can impact the supply chain. Participants added their thoughts.
Rebecca Prox from DSI/Dynamatic in Wisconsin said, “I’d say it slows things down!”
Kelley Plats from North American Coating Laboratories in Ohio said, “I think it hurts your ability to truly establish trust, especially with new customers and processes. Lack of transparency in process, especially toward the end of a quoted lead time is extremely challenging.”
Kyle from Tuffaloy Products in South Carolina said, “If you don't know what's going on you won't be able to effectively find solutions to problems in real-time. Time and money are lost.”
Host Scudder said, “And customers are unhappy. And might go somewhere else.”
Dan Bigger of Optessa Inc in New Jersey said, “Three words: mistakes, extra cost.”
Host Scudder said, “Extra costs are a real pain. And can add up quickly.”
Gina Tabasso from MAGNET in Ohio said, “Customers get antsy, kind of like us with our eBay or Amazon orders.”
Dave Meyer from BizzyWeb in Minnesota said, “Oh man - my sales-and-marketing brain is gonna get stretched today! Prepare for a full-on, shoot-from-the-hip guess-fest today. Looking forward to hearing what the real pros have to say!”
He added, “But I'll say that more visibility means better opportunities to keep the customer engaged, informed, and stay ahead of issues.”
Sue Nordman from Obsidian Manufacturing in Illinois said, “I would say that it greatly affects being able to set and meet lead times on jobs. Nobody ever really wants to hear an “I don’t know, let me check” when it comes to potential delays but without transparency, that’s tough not to have to say!”
Brett from FreightPOP in California said, “It can put customers on edge and cause unnecessary problems, which may lead to them taking their business elsewhere.”
Adam Baker from Schooley Mitchell in Pennsylvania said, “Results in poor decisions being made on imperfect information (SWAGs or "educated" guessing)
VirtuDesk said, “Hmm. We are really not into manufacturing but we can see this could cause delays in shipments and delivery.”
Val W from Monofrax in New York said, “Timing. Projects may be delayed. Without clarity, no one knows when they can start.”
Pavel Stepanov from VirtuDesk said, “Impact on the customer experience as this may cause inconveniences. The worst is losing customers.”
Erin Courtenay from Earthling Interactive in Wisconsin said, “The "wiggle room" built in to accommodate the unpredictable variables (weather, mistakes, etc.) introduces a ton of inefficiency into the system.”
Host Scudder said, “Having good communication with your suppliers is a must so you can plan and pivot when delivery dates change.”
Nigel T Packer from PelaTis Online in Wales, UK said, “It is important for the customer to understand the process. The company must manage the customers expectations... not everyone lives next door.”
Michael Womack from NJMEP in New Jersey said, “In so many ways it would be impossible to list them all. One of the most concerning is losing the ability to anticipate delays. Without real-time visibility, it's all a guessing game!”
Host Scudder said, “Poor or nonexistent supplier technology means you don’t have that first-mile transparency that’s critical to keeping your customers happy and setting proper expectations.”
She continued, “Those that don’t have the necessary technology simply don’t have the tracking and communication abilities you need to be successful.”
How Delays Impact the Supply Chain
The discussion then turned to how delays impact the supply chain. Everyone had thoughts to share.
Plats said, “Frustrated customers, frustrated production supervisors, and many requests for meetings!”
Host Scudder said, “Say NO to death by meetings!”
Tabasso said, “Dominoes falling. One delay causes others causes others then the whole chain is impacted. It also increases costs.”
Prox said “Delays also slow things down. People get anxious and upset when things are delayed.”
Stepanov said, “So true, Rebecca. No one wants delays as we all have a schedule to follow.”
He added, “When you don't have enough supplies, your productivity is affected.”
Kyle from Tuffaloy Products said, “It disrupts everything from production to overall business growth. It's better to make products with materials and resources that are close in order to further reduce future problems as much as possible.”
Host Scudder said, “Not everyone has the luxury of using materials and resources from suppliers close by. Many depend on overseas sources.”
Tabasso said, “Which is why reshoring is a hot topic right now and also hoarding stock/stockpiling.”
Meyer said, “We've seen thousands of examples in covid-times on how delays impact the supply chain. One small, seemingly insignificant delay compounds as everything after it gets impacted. It's like dominoes, but with your cash falling down in rows.”
Nordman said, “It can create that uncertainty mentioned in Q1. We’ve recently been having this issue of one little part holding up huge projects! We’re all going through it though so the delays and challenges are a little more understandable.”
Host Scudder said, “The key is know about the delay ahead of time so you can pivot - maybe find another supplier or change up your production schedule.”
Baker said, “You see more of the precautionary inventory build up , which only exacerbates the supply chain issues.”
Whitney Koch from Welker Inc in Texas said, “One thing we've had to deal with is finding a suitable replacement for a specific elastomer with long lead times. That has taken up a lot of time, and then there's also the issue of communicating the change to the impacted customers.”
Bigger said, “It backs up everything. Suppliers are delayed, manufacturing is delayed and ultimately the end customer is as well.”
Host Scudder said, “Unhappy customer = bad news.”
Brett from FreightPOP said, “Delays can back up every part of your business, from production all the way through to the selling process. Costs keep adding up, but production/selling is stalled!”
Host Scudder said, “Stalled production = negative impact on revenue. What have you seen as useful things to do to avoid stalled production?”
Brett from FreightPOP said, “You can make sure you give yourself plenty of time when you place your orders, so you never completely run out of materials. You can also try your best to source materials locally, so delays won't have as much of an impact. But this can be difficult for many!
Womack said, “It's a domino effect! One delay could cause countless downstream. Just like
Dan Bigger said, one delay will impact the end customer.”
Host Scudder said, “Your ability to deliver to your customers in the last mile is contingent on getting what you need from your suppliers when you need it: the first mile. If you don’t, that’s when you face delays in your own deliveries, and those can result in very unhappy customers.”
Poorly Optimized Delivery Routing
The discussion then turned to the impact that poorly optimized delivery routing can have on the supply chain. Opinions and thoughts were shared.
Meyer said, “Longer delays, missed shipments, frustrated customers, and other delays down the line.”
Prox said, “If delivery routing isn’t optimized or poorly optimized, our shipping department has a few choice words. But it can also slow down the whole process. I sense a trend.”
Plats said. “It can derail it completely. Its like the first domino. If material isn't moved efficiently the next stage cannot go into production.”
Tabasso said, “Oh my, look at the cluster in our ports and the Panama Canal last year.”
Kyle from Tuffaloy Products said, “Increased labor costs.”
Kirsten Austin from DCSC Inc in Missouri said, “Unfortunately, I have clients still waiting on shipping out orders because they are waiting on products to finish their work orders. Port troubles are truly effecting our economy even as we speak.”
Packer said, “I bet the missing parts could have been made in the USA at a slightly higher cost but would have been in stock months ago. Supply chain issues are often a great opportunity for many companies.”
Courtenay said, “Ooooohhh, I feel an SAT question coming on. Please don't ask the one about the trains leaving the station or the one about standing in line for tickets. (please).”
Nordman said, “Longer delays is something that comes to mind!”
Host Scudder said, “Another result of delays caused by poor communication and collaboration with your suppliers is that delivery routing isn’t optimized. Whether you have suppliers shipping items to you, or finished product to customers, routing is critical.”
She continued, “When you have the right technology giving you complete visibility into your supply lines, you have the time and bandwidth to make sure your delivery routing is giving you the best possible delivery timing at the best possible price.”
She added, “When you don’t, things don’t get where you want them when you want them there. That can be a fatal miss in today’s business environment.”
The High Cost of Delivery
Participants were then asked to share their thoughts on how the high cost of delivery can affect the supply chain. A lot of opinions were shared.
Tabasso said, “It's passed on to the consumer and everyone in between as we can see by grocery prices.”
Meyer said, “Higher costs impact pricing, but also availability and timelines as customers try to "wait out" the price increases. See the delays in the construction industry right now due to the price of lumber as example.”
Koch said, “That’s true! Unfortunately, you can’t really “wait out” the prices at the grocery store or the pump, but I know I have been delaying purchases because of long delivery timelines and higher costs.”
Val W said, “The word of the day is "inflation."
Bigger said, “One word: Inflation.”
Nordman said, “It will raise prices on everything else all the way down the line.”
Plats said, “Everything costs more.”
Courtenay said, “On the plus side - sure makes made in the USA and onshoring a more desirable choice.”
Brett from FreightPOP said, “With shipping costs through the roof, companies must maintain delivery in order to stay alive. This has created a shift from viewing supply chains as a cost center, to a value driver.”
Host Scudder said, “When things fall behind, but you have a must-meet arrival time, the only way to make up lost ground is to pay more than you’d planned for shipping.”
She added, “That costs you dearly on your margins in the short term. In the long term, it can drive bad behaviors to get the high delivery costs back down, like carrying excess safety stock inventory. This increases your inventory carrying costs and drives up your annual expenses. It’s a vicious circle.”
Poor Delivery Agility
The discussion concluded with shared thoughts about the impact of poor delivery agility on a manufacturer. Participants weighed in with their opinions.
Tabasso said, “Poor delivery to the customer or scrambling to meet demand.”
Prox said, “Many of these impacts can result in unhappy customers. No one wants that. Then they leave you.”
Plats said, “Poor customer experience.”
Baker said, “At the end of the day, it will all impact revenue and growth - loyalty will suffer, you'll spend more time fixing relationships than building them.”
Courtenay said, “Over-reliance on any one option presents a lot of risk.”
Meyer said, “Lost revenue, delays, frustration. Agility is key to adapt in today's environment (10x more than ever before)
Koch said, “Not sure if it’s an issue with agility, but I wonder if carriers are just overwhelmed and thus service is not as great as it could/should be. We have had some products damaged in transit. Not good for anyone involved.”
Host Scudder said, “You’re not the only one who sometimes might need something faster, or in different quantities, than what you originally specified. Your customers oftentimes will too, especially these days.”
She continued, “When your customer asks you to expedite things, or make other changes to their orders, you need to have a closed loop with your suppliers to make that happen.”
She concluded, “It’s one thing to request that change, but a whole other thing to have it confirmed and documented in a closed loop and updated back into your ERP.”
There are many common inefficiencies within the first mile that can easily create bigger issues throughout the logistics process. By optimizing the core logistics components, businesses can focus on becoming more efficient at the start. This CAN, and likely WILL, impact the entire process in a positive way for manufacturers and their end users.
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