How Weather Can Impact Your Supply Chain
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Posted by Michael S. on November 28, 2017 in Manufacturer Focus

As you're probably aware, this hurricane season was especially bad and inflicted some major damage. The impact of these storms was felt not only by the states directly impacted, but through all 50 states and even some other countries. For example, the price of gasoline in Wisconsin increased by about 35 cents due to refineries in Texas and Louisiana shutting down for repairs.

 

Unfortunately, even local weather events such as blizzards, flooding, or windstorms can impact your business. If you are in food processing, a large hailstorm, flood, or an unseasonable drop in overnight temperatures can cause your suppliers to be unable to harvest enough product for your operation. Bad winter weather in the Rocky Mountains can cause delays to your supplies coming from a coastal port. Wet and warm springs have caused delays for loggers, who then could not cut and get product to sawmills for further processing. 

 

Far too often, I have heard from manufacturing companies that they aren't concerned because they don’t have a need for special parts. But when catastrophic events happen, it is often too late to plan and other companies are likely in the same situation. Keep in mind, when the supply is tight, the cost goes up and the availability of existing inventory dwindles fast.

 

Here are a few tips that can help you stay open if weather affects your supply chain.

 

  • Understand the complexity of your supply chain

    • Even simple parts like nuts and bolts can be impacted 

    • Understand the origin of your components, materials, and supplies  

    • Understand the geographical weather hazards of your supply chain 

    • Understand the hazard that weather can cause to transportation:          

      • Time delays 

      • Additional cost due to in-route storage 

      • Alternative means of transportation (e.g., air, rail, truck)   

  • Multi source your supplies    

    • Move past local and regional sources 

    • Do you need a global source? 

    • Identify alternative materials, components, and suppliers 

  • Vertically integrate 

  • Increase inventory

    • If your supply chain is volatile to weather impact 

    • Stock critical machine and equipment components in house 

  • Utilities

    • Install a generator 

    • On-site natural propane gas storage tank 

    • Freshwater storage tanks if your operation depends on clean water 

  • Get business interruption insurance with an endorsement for dependent properties   

 

In addition, weather can interrupt employees' commutes to and from work or delay finished product shipments to customers.

 

As you see, there are many things that can be impacted by abnormal weather, potentially causing you a great deal of headaches in your operations.

 

One way to see if you have successfully identified potential issues with your supply chain and if you have valued solutions in place is to perform a real-life test. Without warning, tell your operations that you are suddenly out of a few items. See what happens. How long can you operate effectively? Is your staff able to come up with options?

 

I realize this is a bit extreme, but it can be a valuable tool. For example, while running this test, you might realize that if you are out of coolant, you must shut down your machining operations, which then brings the rest of your operation to a halt within a short time.

 

Let’s hope we're never impacted by severe weather or another catastrophe, but some up-front planning can help reduce or eliminate the impact to your business. As Benjamin Franklin once wrote, “An ounce of prevention is worth a pound of cure.” 

Michael S. is our Manufacturing guru
I have over 30 years experience in a broad range of manufacturing areas. Starting with an apprenticeship in Germany I’ve worked my way through a verity of positions within the manufacturing field. I got my start as a Tool and Die maker. I next became a supervisor of a class A tool room, then manager of a machining department. I was exposed to lean manufacturing in the mid 90s and adapted the lean philosophy. Loving and teaching the lean approach, I moved on to become a Continuous Improvement manager which led to a job as a manufacturing manager. I joined Acuity in 2015 as their manufacturing expert. I hope to evolve how manufacturers deal with, and think about insurance companies, as well as be a resource to my fellow employees – enabling them to better understand the unique needs of manufacturers.


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Posted By: Michael S. on October 23, 2017 in Manufacturer Focus
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