Paul Chaffin, senior vice president, president of the medical and pharmaceutical solutions division at Molex, discusses the importance of a robust supply chain, while highlighting the impact of COVID-19.
The impact of COVID on public health has reached global supply chains across a wide range of market sectors, making it one of last year’s defining stories for manufacturing.
In recent weeks, we’ve seen how the pandemic has played a key role in the global semiconductor shortage. Because of the vital role these electronic components play in every aspect of our lives, this so-called “chip cracking” has taken a heavy toll on production forecasts for everything from automotive manufacturing to home appliances and consumer technology. .
Global supply chains are complex and often have dependencies that only come to light in times of crisis and depend on third parties to remove bottlenecks. These bottlenecks can be particularly acute for manufacturers of custom products, as well as for companies that rely on just-in-time (JIT) management strategies.
While relying on low production of inventory within an ecosystem of third-party suppliers has already worked well as a means of reducing risk and creating predictability within a supply chain, this model becomes vulnerable if these suppliers face their own supply issues.
Nationwide closures and stay-at-home orders issued in response to the rapid spread of the virus have proven to be such an obstacle. COVID aside, earlier this year colleagues in the United States faced the aftermath of an abnormal winter storm that resulted in power outages across Texas. This has led to global shortages of refined petroleum products like polymer resins, which are an essential material in the manufacture of a wide range of electrical appliances.
During these crises, the companies that suffered the least were those that had strong backup plans and were able to be resilient, flexible and nimble in the face of shortages and logistics challenges.
Supply chain shortages caused by the types of ‘force majeure’ events we’ve witnessed over the past 14 months should now prompt industry leaders to consider how to effectively reduce risk in their chains. supply. To do it right, you need to reduce risk beyond the immediate vendors: end-to-end information and end-to-end strategy are essential.
When it comes to medical technologies and connected health devices, it becomes even more essential that the supply chain be as robust as possible. This means working proactively to identify potential areas of shortage as early as possible so that these can be alleviated before they cause painful bottlenecks.
How to effectively maintain this vigilance? The first key factor in improving readiness to reduce potential supply issues is the intelligent use of data, which gives us a single view of the entire planning and execution process. This allows us to seamlessly link the changes we see in our customer plans and modify our workflows accordingly.
We know that digital transformation has the power to redefine healthcare, especially in pharmacovigilance and drug administration, but this innovation can also optimize supply chains by helping these new medical interventions to be delivered. get to the right health professionals on time.
Using purchasing intelligence platforms to help anticipate supply chain challenges and mitigate risk is essential to being part of a strong supply chain. For example, at Molex, we have measures in place to quickly deal with increases in demand and supply shortages during the pandemic, to avoid disruptions further down the chain. This intelligent use of data is essential to enable engineering, procurement and sales teams to make better decisions, faster.
Second, alongside the intelligent use of data to improve vigilance and agility in the supply chain, there is the value of partnerships with suppliers and customers. From our own experience, we know the tangible value that these close ties with our clients can have in times of challenge.
When supply chain disruption started to emerge in March of last year, our integrated team was strongly committed to helping customers respond to critical needs quickly. For example, Molex helped Jabil quickly respond to demand from a major manufacturer of personal protective equipment (PPE) during the ventilator shortage amid the pandemic. The need for a dramatic increase in the volume of key parts for legacy ventilators has led our team to assess risks, develop contingency plans, secure alternative sources of materials, and develop new technological innovations that have made advance existing products and then accelerate manufacturing to unprecedented speed once the facilities reopen. This meant a massive influx in the supply of these critical medical devices, at a time of great need. This is just one example of the value generated by our 25 years of collaboration in strengthening alignment between technology roadmaps and critical customer focus areas.
The results were transformative: We were able to increase fan component production from an annual purchase order history of about 2,000 pieces to 20,000 pieces in about six days. A week later, Molex delivered an additional 16,000 parts to support this hugely important product build – and made a significant contribution to addressing acute shortages.
By understanding the needs of your partners in the supply chain, you can quickly understand how alternative sources of materials and components can seamlessly integrate into their processes. These quick responses are only made possible by the strength of long-standing business partnerships.
Supply chain design
Ask the question: “Are we designing for our supply chain?” is a critical step. This means doing everything possible to understand the risks associated with each dimension of a new line of medtech products. In order to integrate optionality into the supply chain, customers must understand where the risk lies. An intimate knowledge of everything that goes into the nomenclature and each item of a capital expenditure is key. As well as asking even more related questions such as: How can this translate into alternative sources for the components, if necessary? How will the geography of the manufacturing base affect the risk?
COVID and the Texas winter storm also underscored the vital importance of designing supply chain risks throughout a product’s lifecycle. If you started the product design process in January 2019, the audit processes may have suggested that the external risk would be very low given the information available at the time. But global events since then may have drastically changed your costing, especially in component sourcing.
Molex is in the middle of its own supply chain, constantly challenged to ensure that we can access the parts and materials necessary to meet our customers’ needs in a timely manner. The pandemic has already reinforced many things about our role, the most important of which is that we are part of an end-to-end global supply chain. As such, we must continue to develop a better understanding of this supply chain and use this knowledge to inform our own responses.
While we can never consider every eventuality, we can ensure that we are in the strongest possible position to adapt quickly and effectively to the changing risk profile of our supply chains if we follow the strategies outlined above. -above.