Resilience in industrial supply chains
Supply chain resilience is key, yet manufacturers of industrial products face near-continuous disruptions globally that add costs and test their abilities to adapt. Challenges currently cited include high but varying demand, rising costs of raw materials and freight, and slow deliveries due to truck driver shortages and growing congestion at container ports. Root causes for extended supply chain instability often include overreliance on low inventories, rationalization of suppliers, and hollowing out of domestic capability due to years of offshoring. This can come to a head when sourcing parts or services for the maintenance and repair operations (MRO) of an industrial manufacturer.
Strategies to move ahead
Supply chain strategies for industrial manufacturers in 2022 and beyond will be multipronged. These range from adding to or diversifying the supplier base in existing markets to enhancing data integration for supply-and-demand visibility and planning. Manufacturers are increasingly integrating operational data for more transparency and insight in their operations – the ultimate goal being the ‘smart factory’ of the future (Industry 4.0) that will transform the way products are made. For example, centralizing a manufacturing control tower can bring together data from different facilities, production lines and equipment, to visualize dependencies on suppliers and effects on logistics.
Supply chain integration is essential
The risks of not “connecting the dots” through available data can be significant: according to Deloitte1, a lack of supply chain integration could stall smart factory initiatives for 60% of manufacturers by 2025. Beyond the data, reshoring (or nearshoring) of component manufacture or even final assembly is on the increase, as globally sourced, low-inventory models continue to be challenged.
1 2022 manufacturing industry outlook (Deloitte)
Overall Equipment Efficiency
Similarly, OEM machine builders depend on a continuous supply of quality components to ensure consistent machine performance and on-time delivery – a particular challenge when the BoM includes made to order (‘make’) parts. The tight installation schedule for new production lines at industrial products manufacturers means that missing your delivery slot because of a substandard (or worse still, a missing) BoM part, or having a slow ramp up once installation is completed, can delay an entire product launch for the customer! That’s why machine builders today are focused on ‘vertical startup’ of their equipment, so that customers have no delay getting production up and running following installation and can quickly realize an optimal OEE (Overall Equipment Efficiency).
Factory of the future
Driven by the increasing adoption of Artificial Intelligence, smart sensors and other advances such as the Internet of Things, the concept of Industry 4.0 is fast becoming a reality in industrial circles. In the future we foresee a more advanced warehouse and supply chain design, with the use of more automation including robotic systems, for example, to supply different parts of the production line. Today, MAG45 still has staff embedded at many of its customers fulfilling this task manually.
We are alert to other future trends in manufacturing and supply too: for example, additive manufacturing or 3D printing. At present this is largely confined to our customers in aerospace, automotive and medical (prosthetics) for rapid prototyping and small runs of custom parts. In the future, as equipment is designed with the potential for 3D printing in mind, we may see these techniques transform the way in which maintenance and replacement parts are sourced and supplied. MAG45 is keeping abreast of these and other emerging trends.