The A-Team: The Inside Man
Accurate contingency planning is key to minimising disruption and production following summer shutdowns
Summer is typically a time when manufacturers and their suppliers in Europe become quite wary of potential disruptions to the supply chain.
Companies are increasingly adopting contingency strategies to deal with the two to three weeks of reduced activity in August, but more still needs to be done if manufacturers are to avoid costly delays to production.
Some of the recurring difficulties experienced before and after this period are: stockpiling of material, both pre-and post-shutdown; shortages caused by tier-1 and tier-2 suppliers with different shutdown dates; quality issues raised by the use of skeleton staff; temporary packaging and inadequate labelling; and, for carmakers, the difficulty of acquiring parts needed for engineering changes.
Production delays caused by shortages of components can result in severe headaches for manufacturers. This has become more challenging since the recession, as suppliers have tended to reduce their stock levels, which has affected their flexibility at this time of year. Many European countries are also starting to introduce tighter vehicle restrictions across their borders during the summer holiday period, which has increased the demand for smaller transport vehicles or air freight rather than articulated lorries.
Stockpiling immediately before and after shutdowns often results in requirements for extra deliveries in a short space of time. Production planning at this time of year can be very challenging, particularly when building products such as cars to order, as it is quite common for tier-1 and tier-2 suppliers to shut down during different weeks. Tier-2 shutdowns are often not confirmed until a few months into the year, leaving little time for planning.
Although suppliers and OEMs do meet to plan how to satisfy additional requirements, long periods of disruption can often be experienced, as up to five weeks of stock can be required in one go, resulting in a significant strain on the supply chain.
Many suppliers have employed skeleton crews in recent years in order to be able to continue a manufacturing and distribution operation during summer shutdowns. However, manufacturers have reported issues arising from short-term infrastructures of this kind, including part-fulfilled shipments and inaccurate labelling.
The increase in demand for components before, and particularly after, shutdowns often causes suppliers to run-out of standard reusable packaging and resort to temporary packaging that may not be sufficient to protect the goods in transit.
Clearly, holding extra inventory is not ideal for manufacturers, and neither is the additional decanting involved in receiving supplementary deliveries. Accurate contingency planning is the key to making sure that disruption is minimised and production can continue as smoothly as possible following the summer shutdown period.
Brad Brennan is MD of Evolution Time Critical
www.evolution-timecritical.com
Companies are increasingly adopting contingency strategies to deal with the two to three weeks of reduced activity in August, but more still needs to be done if manufacturers are to avoid costly delays to production.
Some of the recurring difficulties experienced before and after this period are: stockpiling of material, both pre-and post-shutdown; shortages caused by tier-1 and tier-2 suppliers with different shutdown dates; quality issues raised by the use of skeleton staff; temporary packaging and inadequate labelling; and, for carmakers, the difficulty of acquiring parts needed for engineering changes.
Production delays caused by shortages of components can result in severe headaches for manufacturers. This has become more challenging since the recession, as suppliers have tended to reduce their stock levels, which has affected their flexibility at this time of year. Many European countries are also starting to introduce tighter vehicle restrictions across their borders during the summer holiday period, which has increased the demand for smaller transport vehicles or air freight rather than articulated lorries.
Stockpiling immediately before and after shutdowns often results in requirements for extra deliveries in a short space of time. Production planning at this time of year can be very challenging, particularly when building products such as cars to order, as it is quite common for tier-1 and tier-2 suppliers to shut down during different weeks. Tier-2 shutdowns are often not confirmed until a few months into the year, leaving little time for planning.
Although suppliers and OEMs do meet to plan how to satisfy additional requirements, long periods of disruption can often be experienced, as up to five weeks of stock can be required in one go, resulting in a significant strain on the supply chain.
Many suppliers have employed skeleton crews in recent years in order to be able to continue a manufacturing and distribution operation during summer shutdowns. However, manufacturers have reported issues arising from short-term infrastructures of this kind, including part-fulfilled shipments and inaccurate labelling.
The increase in demand for components before, and particularly after, shutdowns often causes suppliers to run-out of standard reusable packaging and resort to temporary packaging that may not be sufficient to protect the goods in transit.
Clearly, holding extra inventory is not ideal for manufacturers, and neither is the additional decanting involved in receiving supplementary deliveries. Accurate contingency planning is the key to making sure that disruption is minimised and production can continue as smoothly as possible following the summer shutdown period.
Brad Brennan is MD of Evolution Time Critical
www.evolution-timecritical.com
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