How Manufacturers Can Mitigate Pandemic-Related Supply Chain Disruptions
The post-pandemic manufacturing world is markedly different from any period we’ve experienced before—and it’s mostly due to supply chains that can’t seem to catch a break.
From a lack of available materials at the top to lags in transportation at the bottom, buyers are left to deal with unconventionally long lead times and increased costs.
While there isn’t much we can do to improve the supply chain itself, KAD is ready to help our clients stay informed and make wise decisions to navigate these challenges. With a solid partnership and the right preparation, we can better manage this issue together.
How the Pandemic Disrupted the Global Supply Chain
Supply chain disruptions began when businesses shut down at the beginning of the pandemic. Labor was temporarily scaled back, but once things opened back up, all the unfinished work compounded. Right now, nearly every point in the supply chain is swamped with unfulfilled orders and an ability to meet growing demands.
As you likely already know, there are three key areas where manufacturing is struggling the most:
- Materials. Most machine shops are unable to acquire raw materials as easily as they could before the pandemic. Material suppliers and mill manufacturers lack the necessary tools, funds, and labor to prepare these materials, resulting in longer lead times for shops and their customers.
- Labor. When lockdowns were in effect, factory production abruptly came to a screeching halt. Even after work resumed, social distancing requirements interfered with workers’ productivity. Today, the manufacturing industry continues to grapple with high unemployment rates and widespread job insecurity.
- Transportation. Countries with closed borders prevented raw materials from entering and completed products from exiting. Materials transported via ship, truck, and aircraft were unable to unload their cargo, leaving them sitting offshore indefinitely. Though many restrictions have been lifted, the backlog for shipping and delivery continues to grow.
How Supply Chain Disruptions Impact Manufacturers
According to research conducted by the Institute of Supply Management, raw material prices have gone up for 12 consecutive months, the highest they’ve been since July 2008 during the Great Recession.
Though material costs are relatively minimal for most prototype manufacturing, we’ve witnessed price increases firsthand: in April of 2021, a single 0.25” piece of aluminum plate cost $89 from our supplier. Now, the same piece and cut size costs $142.
Unfortunately, lead times for suppliers have increased substantially, too. In some instances, our lead times for raw materials have gone up by an entire week.
There are problems that all manufacturers are navigating right now. So in your search for quotes, watch out for shops that claim to be unaffected by supply chain disruptions. Chances are they’re trampling their own suppliers or overrepresenting what they’re capable of.
Best Practices for Mitigating Supply Chain Disruptions
KAD is more committed than ever to maintaining strong partnerships with our clients to navigating this tumultuous time together. To keep your project on track, here are our top suggestions:
- Get a new quote. As material availability fluctuates, quotes are bound to change rapidly. If you’ve been sitting on an estimate, we strongly advise you to get an updated quote to ensure you’re aware of the most up to date material costs.
- Start your project sooner rather than later. Build some breathing room into your timelines, especially when you have a hard deadline for project completion. Anticipate that lead times may be longer than you’re used to. It’s even helpful to add a buffer into your timeline, as delays due to material sourcing issues are now more likely than before.
- Ask about easy-to-source materials. We keep common materials in stock at our shop so that we can start working on parts ASAP. Check with us to see which materials we already have in inventory. We can also help you determine which materials are readily available for sourcing.
- Give a heads up before that RFQ. We realize that many of our clients get estimates from multiple shops. But if you have a long-term partnership with us and plan to work with us again, give us a heads up during the design phase of your next project. We may be able to locate and source material early on so we’re ready to get started on prototype manufacturing once your design is complete.
We’re doing everything we can to mitigate supply chain vulnerabilities on our end. And that commitment to partnership and maintaining open communication is how we operate all the time, not just during a massive supply chain disruption. No matter what’s going on in the world, you can expect the same dedicated service from our team.
Contact KAD today for your next prototype CNC machining project and we’ll get through this turbulent time together.