Although most of the everyday complications presented by the pandemic for the common person have dissolved (toilet paper is back on the shelves!), the global supply chain continues to put strains on many businesses. Add the slow recovery to always present challenges of international political turmoil, cyber security challenges, and raw materials acquisition, and you have a scenario where sourcing and price consistency continue to present problems for manufacturers.
For the HDD industry as a whole, there’s good news and bad news. The good news is that multiple international governments including the U.S., Canada, Australia, the United Kingdom, and India have recently passed healthy infrastructure bills focused on delivering utilities to communities. This news, however, is caveated by the increased demand for new drills and the long lead times associated with getting them to markets where they’re most needed.
At DCI, we’re always adapting and looking to leverage our local supply chain partners so we can best serve ours and in turn, our customers’ needs. Having our operations and manufacturing based in the U.S. certainly helps, but there are still areas we feel we can improve.
To get some insights on how the pandemic impacted DCI’s operations and where we are now, I asked DCI’s Materials Manager, Tami Vanderpoel, a few questions. Here’s what she, with input from her team, had to say.
WHAT WERE SOME OF THE SUPPLY CHAIN CHALLENGES DCI FACED DURING THE PANDEMIC?
Some of the supply chain challenges we faced during the pandemic were supplier factories shutting down due to COVID-19, staffing shortages and capacity constraints, component allocations and shortages, increased prices, extremely long and unreliable lead-times, and accelerated discontinuance or obsolescence of components.
WHAT KIND OF STRATEGIES DID THE MANUFACTURING AND PROCUREMENT TEAM MAKE TO EASE THE PAIN?
One of the main strategies we used was consistent and detailed communication with our supplier partners. We provided extended purchase order coverage and forecasts with our key suppliers to address demand for raw components or materials, some with lead times exceeding a year.
We also increased our safety stock on inventory we determined to be at-risk from supply chain disruptions. In addition, we explored alternative components, materials, and sources. We engaged with the DCI engineering team when design updates were necessary. Last year we implemented our Supplier Engagement program to strengthen relationships with our key suppliers.
IN WHAT WAYS DID HAVING THE MAJORITY OF SUPPLY CHAIN AND MANUFACTURING BEING DONE IN THE USA EASE SUPPLY CHAIN ISSUES?
Having domestic sources shortens the supply chain, reducing risks and variability. In our experience, domestic suppliers tend to provide better market and supply chain updates and are more responsive, largely due to work schedules that more closely align. This also helps with reduced transit time, importation costs, and the building of relationships with local communities and suppliers.
WHAT IS THE STATUS OF OUR SUPPLY CHAIN TODAY? ARE WE BEYOND THE CHALLENGES PRESENTED BY THE PANDEMIC? ARE THERE ANY NEW ISSUES ON THE HORIZON? IF NOT, WHAT ARE WE DOING TO KEEP OUR SC HEALTHY?
Our supply chain today has improved greatly since the pandemic, but we are not back to pre-pandemic levels. Today, we are experiencing improved lead times, pricing, and on-time delivery, and fewer logistics delays with our carriers. Certain commodities such as electronics continue to see long lead times but are expected to recover, albeit at a slower pace than others. Maintaining our vendor relations, consistent communication, and staying on top of market trends is extremely important in keeping our supply chain healthy. We rely on it to make smart, informed purchasing decisions.