A few years ago, the phrase “supply chain” was known only to industry professionals. With a global supply chain crisis affecting every sector of industry, it’s become a term within the common vernacular. A variety of factors have contributed to supply chain fluctuations over the past three years.
- The global pandemic caused factory shutdowns that resulted in missed deliveries of everything from raw materials to finished products
- Quarantined workers and worker shortages led to rolling production capacity reductions
- Dock strikes and worker shortages caused disruptions in international shipping
- Lack of sufficient drivers to transport goods led to late and rescheduled delivery
- The conflict in Ukraine presented additional volatility to the market by introducing factors such as inflation, the energy crisis, decreased availability of lithium to build batteries, and the toll on those affected
Before the global supply chain crisis, contract manufacturers (CMs) provided a service for Original Equipment Manufacturers (OEMs) by ensuring the CM had everything they needed for production. The CMs ordered what was needed for products in steady-state production and delivered the finished goods when expected. The CM only needed a forecast of when the products were due and they would source the parts, schedule production, and complete the manufacturing process. The OEM focused on what they did best: designing new products and fulfilling orders for their customers.
Now contract manufacturing has a new normal. With the supply chain crisis, CMs are pushing the responsibility to find parts on their customers. This shift is happening because each customer and every build requires a handful of parts to be located every week. It used to be a handful of parts across multiple customers that need to be found. The existing resources are overtaxed. With the worker shortage, CMs have limited options and they end up asking their customers to provide the necessary resources.
The OEM is becoming responsible for the parts the CM can’t find. Larger OEMs can more easily absorb the tasks with their existing supply chain staff. However, the burden is difficult for small companies that only have processes for managing the finished product. They don’t have the resources or expertise to find parts, nor do they have the relationships with brokers.
While managing supply chain fluctuations over the past 13 years, the staff at Zebulon Solutions have become experts in finding reliable sources for parts. They can step in quickly to find buyers and provide options. With their in-house engineering resources, Zebulon Solutions can identify alternate parts that will work in design. Then production can be resumed, which means the OEM is back in business.