The recent coronavirus outbreak has reinforced the need for manufacturers to have a risk mitigation plan in place so they’re prepared for disruptions to their global supply chain.
According to a survey conducted by ThomasNet, roughly two out of every three North American manufacturing companies have felt the disruptions caused by the recent pandemic on their production facilities and supply chains. It has caused plant shutdowns and delays in shipping plastic injection-molded parts and tooling.
Whether the next disruption is caused by a disease, natural disaster, political unrest, currency fluctuations, a trade war or other unforeseen event, manufacturers must take a fresh look at how and where they source the components that go into their products.
Here are some best practices to consider:
Evaluate and identify your current risk scenarios. What areas of your business have potential risk exposure? Identify and investigate potential scenarios for supply chain disruptions.
Prioritize them by their likelihood to happen and potential impact. How likely is it that each scenario could happen? Then estimate the potential impact if each event took place. Start your continuity and risk mitigation planning with the most likely and highest-impact scenarios.
Aim for a shorter, simpler supply chain: When you’re looking for ways to simplify your supply chain, don’t stop with your overseas component suppliers. Look upstream at their sub-suppliers, such as raw materials or outsourced secondary processes (painting, assembly, machining, etc.). Each of these steps represents an opportunity for potential disruptions and quality problems.
When it comes to supply chains, simpler is better. For one thing, a shorter supply chain gives you greater agility to meet changes in demand. Production and quality problems can also be solved easier and faster. And indirect costs such as warranty claims, travel to supplier locations, and the cost of inventory in transit can also be minimized.
Consider dual sourcing your components and tooling: To mitigate risk, spread your injection molding out over several regions and suppliers. If you’re planning to re-shore tooling from China or other countries to North America, it may require modification to work on non-metric molding machines, including:
- Replacing metric nozzles and bushings with imperial standard equivalents
- Replacing water line fittings with your molder’s standard fittings
- Drilling and tapping new knockout plate actuator holes to imperial standards and spacing
- Installing a metric eyebolt for hoisting.
In addition, you may incur costs for greasing and crating your tools, import duty (3.1% of the mold purchase price), shipping and potentially other export costs.
Include your partners in risk planning. Take an end-to-end approach to risk mitigation. Make sure your tooling, material, injection molding and transportation suppliers have disaster recovery and business continuity plans in place that align with yours. Why? Because your supply chain is only as strong as its weakest link.
Increase your parts inventory: Larger safety stocks can help insulate your company against supply chain shocks. Manufacturers that maintain a larger inventory of parts are in the best shape during the current crisis. Those that have sourced parts on a just-in-time basis using long, complex supply chains are feeling the most pain.
How New Berlin Plastics can help
If you’re planning to move plastics component manufacturing closer to home, look for a supplier that can help you to get up and running quickly, with a minimum of hassle. At New Berlin Plastics, we have developed a detailed process to ensure that tool transfers happen smoothly.
Our highly disciplined LaunchLogic process enables us to get new parts into production quickly. That saves you money and helps to mitigate risk. It has compiled a 98% on-time launch track record, achieved over 100 simultaneous open customer projects. This process is also designed to handle multiple tool transfers at once, so we can bring more of your parts into production faster.
In addition, New Berlin Plastics is committed to ongoing reinvestment in our business. For example, our significant investments in automation enable us to not only to eliminate labor from production processes. They’re also helping us creatively apply people, processes and technology to solve our customers’ molding challenges.
When you’re ready to re-shore your plastic components, contact us to discuss your needs.