Tag Archive: manufactureres

What’s Going On Around the World?

July 11th, 2020

After receiving questions from multiple people about “What’s going on in Asia?”, we dug into what’s going on around the world (at a high level). In today’s globally-connected world, it isn’t a question you can ignore!

Starting with Asia, from a supply chain point-of-view, product continues to move. All three China ports are open and the volume has picked up. China’s capability was back up to at least 80% of the pre-coronavirus levels. However, once China started ramping up after the first infection wave, N.A. and Europe were under lockdown, impacting customer requirements. According to CEOs from across the U.S., they experienced delays initially but it is largely back to ‘normal’. On the other hand, we are also hearing that some folks are experiencing extended lead times. It certainly can depend on the product, material, specific supplier, etc.

Customers that switched supply to Vietnam prior to coronavirus have experienced high levels of service and are generally happy. While there aren’t a lot of numbers coming from Vietnam, it appears as though manufacturing has largely carried on to the levels needed. Of course, if you were in process of transitioning to Vietnam when coronavirus hit, it probably has been put on hold. India shut down for a month during coronavirus but started up essential manufacturing early in the ramp up. India hopes to ramp up manufacturing as companies accelerate the de-risking process from China whereas Vietnam is already in that position and hopes to expand. Japan and South Korea largely carried on through coronavirus. The only noteworthy disruptions were caused by shortages of supplies from their extended supply chain. Overall, there were initial delays with Asian supply, and the degree varied quite significantly based on the source of supply.

With that said, there are increasing levels of concern about a second wave of coronavirus hitting the Asian supply chain. Beijing has been in lockdown with surging cases of coronavirus. Although not integral to the supply chain, it is a bad sign of potential negative impacts to come. It is recommended to bring inventory in ahead of the holiday season and to be cautious with paying cash upfront as several small and medium size Chinese suppliers are struggling.

In Europe, it varied significantly by country. German manufacturers kept operating throughout the coronavirus lockdown. Since they saw the virus coming from what happened in Asia, they implemented social distancing and other protocols throughout rapidly. Certainly, Spain and Italy were impacted more severely and shutdown for a period of time. Several European and U.K. car manufacturers shutdown due to lack of demand and significant disruption in the supply chain. Aerospace companies in the U.S. experienced issues receiving essential components from Europe during the pandemic. Overall, CEOs across the U.S. said that supply from Europe wasn’t interrupted significantly.

U.S. manufacturers of essential products were largely able to continue producing. Of course, depending on the customers’ served, volumes dropped dramatically and disappeared (suppliers to hospitality for example) or experienced aggressive growth (lawn and gardening, toilet paper, PPE).  However, on average, volume dropped to 50-70% of the pre-coronavirus levels. CEOs from multiple industries have said the biggest issue has been disruptions in the supply chain. There are examples of essential U.S. manufacturers experiencing issues receiving materials/component parts from Mexico, Europe and Asia. Not every country had the same definition of essential. Consequently, there is a lot of talk about regional manufacturing and reshoring.

Brazil has been hard hit with the coronavirus recently, and manufacturers have been forced to shutdown. No part of the world has escaped this pandemic! Thus, the global supply chain has come into the forefront and is taking a seat at the table. Are you going to chase your supply chain or build appropriate diversification and flexibility and identify acceptable levels of risk upfront in your strategy discussions?

We are seeing a surge of supply chain strategy assessment and roadmaps. Are you evaluating your supply chain so that you can take charge of your future? There is no such thing as no risk.  Understanding your customer profiles, changing customer requirements and associated product supply strategies is a place to start. If you’d like to discuss your strategy, please contact us.

 

Did you like this article?  Continue reading on this topic:

Eagle Eye Strategic Focus

Innovation & Technology During the Coronavirus Pandemic?



Demand & Supply Are Out of Whack!

April 27th, 2020

Demand and supply are out of whack to say the least. Manufacturers that supply toilet paper, food, healthcare products and other essential goods are seeing a surge in demand whereas those that don’t are seeing demand plummet. China was under lock down previously (causing a delay in the pipeline), and they are now operating around 80-90%; however, now we are under lock down. Retail sales are non-existent, and so the warehouses are full of the wrong products. Thus, inventory and transportation assets are typically in the wrong place at the wrong time in the wrong quantity. Watch my webinar on just this topic to learn more…

What Should We Consider and/or What Impacts Could Arise? It will not be business as usual as you ramp back up. Be vigilant in staying on top of what is happening and how quickly you can turn the dial to ramp back up. If you go too fast, you could get your supply chain further out of whack and anger customers. On the other hand, if you ramp up too slowly, not only will you lose money but you will also see your competition speed by. Instead, be proactive prior to the end of the shutdown to start things in motion, pay close attention to what’s happening and adjust accordingly. Stay tuned for my eBook,  Future-Proofing Manufacturing & Supply Chain Post COVID-19 

Please share your stories, challenges, ideas and successes. Contact us and please join in our free webinar series and listen to our archives.