Today many businesses are recovering from the impact of the COVID-19 pandemic, natural disasters, and other catastrophes. Supply chain disruptions have made us more aware of our dependencies and the things that we don’t even think about because everything is operating so efficiently. Businesses are looking at their processes and what can be done so that they are more prepared for any disaster or disruption that could have an impact on their business operations.
Supply chains are the core of their business; any disruption in their operations can have a major impact on production and delivery processes. It is a fact that maintenance has a major impact on business operations, and they can’t afford to have equipment break down and sit around and wait for parts that may or may not arrive for days or weeks. When production stops and distribution of products get delayed, maintenance teams are scrambling for spare parts, a specialized vendor, or other tasks, to get things fixed and production back up running quickly. This is costing time, money, unhappy customers, and your business.
In this article, we’ll look at common causes of disruptions, some of the ways you can handle disruptions that you are currently facing, and how to create a plan to better manage your supply chain risk management in the future.
What Is Supply Chain Management?
Supply chain management is the administration of the complete production flow of goods or services, from raw materials to the final product. This involves the development of a comprehensive network of suppliers from development to the delivery of the final product.
What Is a Supply Chain Disruption?
Supply chain disruption is a major breakdown in the production or distribution of a supply chain, which negatively impacts that process. Supply chain disruptions lead to decreased productivity, increased costs, increase in customer dissatisfaction, and more.
Types of Supply Chain Disruptions
Many things can cause supply chain disruptions. The best way to work through these issues is to identify what is causing the disruptions and how you can minimize or eliminate them from happening.
Below are a few reasons your supply chain might be impacted.
Businesses today are all dependent on supply chains and are at major risk for cyber-attacks. A chain reaction triggered by an attack on one supplier can compromise a whole network of providers. Such cyber-attacks like denial of service, data leaks, customer data thefts, disruption of business, and other malware attacks such as ransomware can cause a big disruption in business operations.
Whether facing a hurricane, earthquake, tsunami, or blizzard, any kind of natural disaster or catastrophe will have an impact or cause a disruption to global supply chains. This disruption will postpone or pause shipments, close ports, cancel cargo flights, and have major impacts to supply and demand. These disasters may be centralized to specific locations but can still have a major impact on the supply chain, in the production and distribution of goods.
We are still feeling the impact of the COVID-19 pandemic and the major impact globally on supply chains. Because of the number of people, geographical areas, and global companies affected by the pandemic and other public health crises, this has resulted in a major impact on the supply chains.
Any issues at any stage in the supply chain management can lead to delays in the production of final products. These delays can impact the quality and cause shipment delays.
Any major catastrophe or public health crisis directly impacts the global supply chain and every area of operation, including manufacturing, transportation, and more. As supplier prices change due to many factors, natural disasters, the economy, etc., these changes have an impact on all businesses. These changes disrupt the way you do business, and decisions may have to be made on whether or not to switch suppliers, raise your prices, or see your profits reduced by eating the costs yourself.
Today transportation managers deal with more risks than ever before. The increase in risks of driver shortages, cyber-attacks, deteriorating infrastructure, and the most recent COVID pandemic with many countries and regions instituting lockdowns to avoid viral spread is making it more difficult for freight carriers to deliver goods by land, sea, or air.
Tips for Minimizing Supply Chain Disruptions
One of the major concerns for any business is controlling maintenance operations and ensuring that spare parts, materials, and assets are available.
The best way for any business to weather the storm of supply change disruptions is to be prepared. More and more businesses are looking for ways to be able to manage their processes in one centralized system. They want to be able to see their inventory, manage suppliers, and be prepared to react to any situation. To meet their needs, they are looking at advanced technology to help them manage their supply chain issues, such as computerized maintenance management system (CMMS) software.
Let’s look at CMMS and how this software can help streamline and improve processes, resulting in a simple, more efficient way to do business.
Spare Parts Management
CMMS gives you the ability to manage vendors effectively in order to reduce the risk of supply chain disruption and ensure that the products and services provided are delivered on time. Maintaining inventory control with CMMS software gives you a better insight into spare parts usage and inventory levels. Having this information on spare parts usage gives businesses the ability to forecast needs and optimize costs, quantities, and delivery times.
With CMMS businesses have more control of their entire spare parts inventory process from vendor management to purchasing, stocking, and issuing of parts. Using CMMS to manage these processes gives organizations real-time information and an in-depth view of what’s happening with replaceable components. CMMS automated processes make it easy to generate purchase orders, track information about items, identify their location in real-time, monitor inventory levels and manage returns, and more.
CMMS stores all of your information in one centralized system, enabling organizations to review historic data and identify patterns of parts consumption over time. With the ability to set inventory levels, alerts can be setup when parts-inventory falls below predefined thresholds.
Having mobile access gives users the ability to access information from anywhere at any time. This makes it easier for teams to coordinate maintenance repairs and activities that are dependent on the availability of spare parts inventory. Managing inventory levels through a CMMS eliminates wasted time of trying to track down parts and expensive shipping charges.
With the hundreds of vendors and suppliers to manage, with CMMS you can setup a preferred vendor list to ensure that you are getting the best pricing and using the vendors that you have better relationships with. Track all your vendors and their sales contacts, track and view parts, costs, and shipping timeframes by vendors. When generating a work order, you can identify and associate all the required parts and materials for the job to a specific vendor.
With CMMS software you can easily create and receive purchase orders, track purchases, returns, and run detailed reports.
Track the materials ordered from your vendors and know when they were ordered, where they are at in the shipping process, when they will be delivered, and the costs. As stock levels go below established thresholds, most CMMS can automatically generate Purchase Orders to your vendors to replenish your inventory.
Inventory Returns & Avoid Waste
CMMS makes it easy to manage the return of leftover materials from jobs. Leftover materials can be entered into the system and automatically update inventory levels.
A CMMS improves communications and gives you additional tools to manage work orders, assets, and inventory, while communicating with the assigned vendor directly inside of the work order.
Steps to Help Reduce Supply Chain Disruptions
Unfortunately, things happen on the spur of the moment, and you probably won’t get much advance notice, if any at all, about disruptions to your supply chain, so it’s a good idea to be prepared as much as possible.
By upgrading from spreadsheets, paper and pencil to CMMS software, it’s never been easier for companies to manage or avoid such massive disruptions. Using this specialized software system along with established supply chain management techniques makes it possible for users to reduce errors and costs while optimizing the entire supply chain. Let’s look at a few of the different types of supply chain management tasks and how using an automated system can help make these processes run a lot smoother.
Inventory Management is critical to supply chains, whether you have too little or too much inventory, this can cost you a lot of time and money. You need to maintain a slightly higher-than-necessary stock of all important inventory to provide a buffer against future disruptions.
CMMS provides you insights into your spare parts inventory. With the tracking of historic data within a CMMS, managers can run detailed reports to analyze and identify patterns for each inventory item. Being able to analyze patterns, managers will have a better insight on usage and can establish maximum and minimum stock levels, reorder points, and criticality. Optimize inventory buffers and safety stock levels to ensure that you have enough supplies to keep producing if there is a disaster.
Now is the time to do a risk analysis on your supply chain. You need to assess which vendorssuppliers are the weakest in your supply chain, their geographic locations, which suppliers get parts from secondary ports. Additionally, this includes knowing more about your suppliers and their risk factors: compliance with regulations, their risk management practices, financial strength, and the political stability of their countries or the countries they are dealing with. This is the time to diversify the supplies that you use. Having alternative supplies identified and alternate delivery options in case of a supplier disruption will minimize the risks of not getting a delivery in time, or not getting delivery at all.
With CMMS vendor information, costs and supplies can all be stored and accessed through your centralized CMMS software. Track all your vendors and their sales contacts, track and view parts, costs, and shipping timeframes, identify preferred vendors, and more.
Create a Supply Chain Emergency Plan
Not everything goes as planned, so it is important to have a contingency plan in place for the unpredictable. Create scenarios and plan how you can manage through these disruptions. Going through this process might seem meaningless but being prepared for any disruption that might occur will have less of an impact on your operations. Make sure you have developed an emergency budget to help you carry out the plan.
CMMS software can be used to create, schedule, perform, record, and manage all of your resources. In any business, there is little tolerance for mistakes and inefficiencies. Instead of wasting valuable time trying to manage everything through spreadsheets and paper and pencil using a powerful tool like a CMMS will minimize the risks. CMMS gives you the ability to assign duties, create standardized maintenance processes, and offer a stable communication platform for regular and emergency maintenance tasks.
The Power of CMMS Software Technology
Having the right tools to manage your processes puts you in control and minimizes the risks of business disruptions. Investing in CMMS software helps you manage your supply chain with greater efficiency, reduce expenditures, and lower the risks associated with shipping and receiving. CMMS is designed to simplify workflow, save time, and save money.
Advantages of Using CMMS Software for Supply Chain Management
CMMS software provides many benefits due to its ability to centralize data for asset history, safety inspections, inventory control, predictive and preventive maintenance to facilities that are geared towards scaling down their overall operating costs. Maintenance teams and technicians can easily identify a problem quickly and analyze it to gain insight into maintenance or production operation.
Additional benefits of incorporating CMMS with supply chains will provide many benefits including increased visibility, reduced or eliminated shipment issues, better customer fulfillment numbers, and decreased risks.
Manage & Reduce Costs
From pandemics, natural disasters, cyber-attacks, threats can come from any form, which all can cause major disruptions to businesses. CMMS gives businesses visibility into their supply chain and helps identify problems and risks early so they can address them before they erupt into major disruptions to businesses.
Real-time data ensures everyone is aware of conditions throughout the supply chain. This gives businesses the ability to make decisions based on real-time data and current conditions as well as anticipate and respond to delays and disruptions immediately.
CMMS spare parts inventory management automates and streamlines processes. Maintenance and technical teams have access to inventory levels in real-time. Through the CMMS reporting tools, you have access to historic data, to give you an in-depth analysis of maintenance usage and spending. Having this information reduces overspending and overstocking.
Supplier / Vendor Management Control
With CMMS you will be able to identify, manage and prioritize preferred vendors. Being able to manage multiple suppliers to source materials protects a business against supply disruptions from a single supplier. This also gives you the ability to negotiate better prices, take advantage of promotions, and manage costs and supplies.
Spare Parts Inventory, Pricing & Shipping
When looking at your suppliers keep in mind tax regulations, availability of resources, transportation, and shipping. It is a good idea to review companies who source you with spare parts and materials. A company that has multiple manufacturers might have duplicate supply sources for each product and may be able to source your request from a nearby location, getting you the parts earlier with less shipping fees.
Cyber Security Risk Management
Technology and cybercrime have all had a big impact on supply chains and inventory control. Today a lot of vendor network applications are being evaluated and monitored consistently to protect their data and customer data against cybercrime. These third-party vendors provide detailed scorecards in multiple categories, rating the security risks. Using a vendor with a Security Scorecard of 100% shows your customers that their data is protected.
When businesses are operating with no disruptions and supply chains are operating perfectly, it is easy to put things on the back burner. Today, with pandemics, natural disasters and more, supply chain disruptions are here to stay. It is important to be prepared and have the right tools in place to keep your business operating with little disruptions to business operations.
It is important that businesses start looking at software to help them efficiently manage vendors, inventory, physical assets, and their entire maintenance operations. The days of managing business operations using spreadsheets, paper and pencil are winding down. Businesses need to work faster, be more efficient and be able to manage their operations through any disruption. CMMS web-based systems are effective at managing all phases of asset management and supply chain management. Today, a lot of facilities are depending on CMMS as well as EAM applications to be able to manage and keep track of their assets repair history, analyze life cycles, manage resources, vendors, and more.
In this technology driven world, businesses should not be struggling with trying to manage every step of the supply chain. Every business has its supply chain, but they must identify the risks and implement a good contingency plan to help them minimize any future disruption.
Jeff Roscher is Co-Founder and President of eWorkOrders (Information Professionals, Inc). eWorkOrders is an industry leader in computerized maintenance management system (CMMS) software. Jeff can be reached at jeff@eWorkOrders.com.