Much is made of the impact that natural disaster can have on the supply chain, but businesses in the manufacturing sector are also having to think more strategically about sourcing materials which are becoming ever more rare as we consume more. The British Geological Society has gone on record to state that 52 commonly used minerals are now classified as rare. More troubling still is that 27 of these can only be obtained from China.
Alarm bells ring for supply chain managers whenever their business is forced into a single channel as the margin for knock-on effects on production and stock level is nullified. Where China is the only supplier of elements critical to high tech product development, the best that a business can do is source a number of suppliers to provide fail-over in the event of a disaster. That or stockpile materials, driving up prices in the market and increasing costs through warehousing and the like.
Sourcing additional suppliers can be costly and inefficient, particularly where a high degree of integrated supply chain management between buyer and seller is required. Each new supplier requires significant investment for full onboarding, in both time and money. The provision of a hosted supply chain portal or method by which systems can communicate automatically with minimum onsite intervention can reduce many of these costs whilst delivering the benefits expected of an integrated system.
And although these mineral shortages are currently restricted to high tech electronics manufacturers, other materials are certain to become scarce, affecting the wider manufacturing sector as a whole, regardless of output. The conscientious supply chain manager will be not only scouting for alternate materials and providers, but planning for the capacity required to support and maintain the business relationship.
Does your current supply chain management system provide the flexibility required to add additional capacity as and when required? Can it communicate cross-border without major intervention? If not, perhaps you’d best give Celtrino a call to discuss their Smart Admin platform which can do all this and more.