​MANAGING SUPPLY CHAIN SHORTAGES: WHAT TO DO

Supply chain shortages within world allocations is a recurrent situation that deserves a pragmatic approach where complexity level follows urgency level. With the global crisis we are going through, we are convinced that it is more important than ever to learn from our past experiences and to anticipate each step of a project in order to complete it successfully.

We believe that it is the perfect time to:

• have everybody on board with open mind,
• practice open book,
• sponsor close and strong relationship,
• promote trust and confidence every minute.
• Speed is key, time is money, money is irrelevant…

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At AMW, we believe that two parallel strategies must be applied to best manage this situation and the tensions it is causing:

• Short term: tactical
• Mid to long term: strategic

Tactical:

This first tactical approach is essentially based on communication and transparency between the various project stakeholders. It is essential that each side has visibility on the overall project and its requirements in order to anticipate each step and react in the most agile and efficient way possible. Here are the steps we recommend you follow:

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Get full and precise visibility for real demand from Customers:

• Hourly, daily, weekly assessments and updates
• Size precisely minimum mandatory quantities required
• Classified demand gradually from mandatory to urgent
• Assess and Manage by priority level

Give full visibility to suppliers:

• No biasing, just passthrough the requirements: hourly, daily, weekly
• Explore any potential source of supply: regular and non-regular suppliers, brokers, lifetime stocks, etc.
• Identify potential alternate solutions: compatible components

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Strategic:

Then, it is time to ensure a more sustainable production and have a wider range of movement by expanding your supplier sources and adapting your components and specifications. This strategic approach is essential and the efforts made in times of crisis will pay off in the years and projects to come. Anticipation, prevention, action!

• Extend forecasts visibility to book allocations far ahead
• Enlarge firm orders window to secure orders
• Strengthen partnership
• Leverage past relationships. It is the right time…

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Scroll the bill of materials for alternate sources:

• Approved Vendor List extensions
• Component replacement supported by Engineering teams
• Specifications relaxed under weaver permits
• Ultimately redesign partially the product

At AMW, we apply this process to our supply chain management because the role we play in this area, for our customers, is critical and strategic. Supply shortages are painful for everyone, but how they are anticipated and managed can dramatically change the impact on the business.

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“The biggest risk in this crisis is to wait” – Thierry Basse, Director of sales & marketing

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To go further: The 10 rules for a successful project with an EMS