The topic of supply chains has become so prevalent that people who had no idea about supply chains now do in some way or another. If we take a moment to analyze the state of the supply chain in 2021, it’s clear that supply chain issues were made worse by the COVID-19 pandemic, the economic environment became more challenging for manufacturers, and customers saw shortages of products, as well as price increases of those products.
As such, supply chain disruptions have emerged as one of the most impactful business challenges. A survey conducted by the Institute for Supply Management found that 75% of businesses had experienced supply chain disruptions in the past year. Today, many manufacturers question what other challenges supply chains will face in the year ahead and what they can expect moving forward.
The supply-chain disruption started nearly two years ago as responses to COVID-19 created several interruptions. These interruptions, combined with increasing consumer demand, were a recipe for a transportation bottleneck in the form of port backups. In fact, you may be familiar with the famous line of cargo ships off the California coast that went viral, clearly depicting how the congestion at the ports had surged.
Essentially, the imbalance between supply and demand eliminated all inventory and the “grease” that allows the wheels of the supply chain to work smoothly. Another factor that economists believe has contributed to the supply chain shortages is the growing number of workers quitting jobs key to keeping things running smoothly. A record 4.3 million Americans left their jobs in August 2021, which is the most since the Department of Labor started tracking data in 2000.
Moving Forward Into 2022
While there is no quick and easy fix to supply chain issues, solutions exist. Oden’s 2021 State of Manufacturing report showcases how supply chains are top-of-mind for most manufacturing organizations. When survey respondents were asked about the continuing supply chain problems they’re experiencing, 67% said their challenges were related to certifying new suppliers, and 57% said it was the process of onboarding them. At the same time, balancing supply levels with fluctuating demand continues to be a challenge for around half of the respondents.
Given these issues, it will likely not surprise you that many manufacturers—more than half—are making significant changes across their supply chains. However, 11% are making specific, regional changes and a third are waiting for surges to normalize before making any changes. The other 50-plus percent of manufacturers are redesigning their supply chains with technology and increasing their supplier base, demanding more transparency from suppliers, and re-shoring or near-shoring to be closer to their customers.
How To Be Prepared
As you may know, supply chain disruptions create scary and uncertain times for businesses and consumers alike. They draw attention to our supply chain dependencies that we are otherwise unaware of when everything operates like a well-oiled machine. Sometimes these disruptions are small and localized, and other times they are globally felt. The first step in preparing for supply chain issues is to identify the obstacles you’ve encountered and determine the actions you want to take to ensure your supply chains are resilient, disruption-proof, and ready for the future.
Below are a few things to consider while creating a strategy for managing supply chain disruptions:
- Create a supply chain emergency plan
- Build up inventory
- Conduct a supply chain vulnerability check
- Identify backup suppliers
- Diversify supply base
How AMI Combats Supply Chain Issues in Manufacturing
Many manufacturing companies have struggled to meet the demands of their customers due to material shortages. Because of AMI’s extensive worldwide supplier networks and optimized processes, we stay ahead of the curve, allowing us to move material and our projects quickly to deliver on the needs of our clients right now.
Although there is a slight shortage of materials throughout the manufacturing industry, our team is committed to working with you to find a solution that meets your needs and fits into your budget. So, if you are experiencing long lead times and price increases, please get in touch with us, as AMI is constantly looking for ways to go further for our customers and accomplish even their most challenging projects.
AMI (Ace Manufacturing Industries Inc.) is a family-owned business launched in 1992 with 5 employees in a 4,000 square foot machine shop by Tom Krouth. From its early foundation in the manufacturing of complex and precision machined components, AMI has evolved and grown by a factor of 20X through planned expansion of services, equipment, technology, staff, and facilities under the leadership of second-generation CEO, Kelley Krouth into a full-service supplier for custom manufactured OEM parts.
Our value-added services include collaborative design, machining, contract manufacturing, assembly, painting, raw material procurement, testing, inventory management, and more. By providing complex contract manufacturing services under one roof, we deliver reduced shipping and handling costs to all AMI customers.
Visit our website to learn more: https://ami-mfg.com/