No one can ignore the Coronavirus anymore. All provinces are going into quarantine, we are touching each other’s elbows instead of shaking hands, hands that have never been so clean before. Although temporarily, Corona starts developing a socially disruptive character. As a human being I consider this a worrying experience.
As a professional, I also notice its impact on the supply chain. It has already become clear that container shortages will arise because of the “China quarantine”. The first shortages for the MRO/spares supply chain are already perceptible. One of the reasons is that several companies introduced a “low cost country sourcing strategy” in the last two decades. This meant that China and surrounding countries became important MRO/spares suppliers.
An understandable but nevertheless unwise reaction from companies is now to hoard massively. In doing so, they not only create future non-movers for themselves, but also cause strong bullwhip effects throughout the chain, with all the resulted misery.
I advise therefore to keep the head cool (but the heart warm…) when making the MRO/spares chains Corona-resistant. Of course, there are reasons to get nervous because after all the uptime of assets must be kept guaranteed. However, without a crystal ball, it is realistic to expect that Corona is primarily a “2020 thing”. So, we are dealing with a very annoying, but temporary problem.
Below I have outlined six suggestions for making the supply chain Coron- resistant. The first set contains several straightforward measures, the second set contains a few measures based on the “Never waste a good crisis” concept.
1. Top up stocks of fast and medium movers
This seems like a strange one because we have just qualified “hoarding” as risky and disruptive. However, it is utopian to think that no one will be hoarding anymore. To prevent you from being the only “sensible” company, the motto is: hoard prudently. This is also an easy one. Make a new classification, determine the stock parameters and fill up to the maximum. This is less necessary for slow movers, because that stock is usually enough to bridge six months.
2. Clean up the mess
Let’s be honest; in workshops there are mostly useful, but grey/black stock. Clean these up, put the good stuff in the stock because that only lowers the investment. But also take a look at the “junk” in your warehouse. I mean the non-moving articles that have been relatively cheap for the last 5 years. They are usually not the most critical articles and moreover, they are often still available on the market – or can be printed in 3D.
3. Find alternative suppliers
This is somehow less easy to achieve in the short term, but still essential – especially to avoid delivery problems in future disruptions. Distribution is crucial, especialy when looking at things geographically. But don’t make this too difficult, so don’t start with the Original Equipment Manufacturers but start with distributors and wholesalers.
“Never waste a good crisis”
4. Get started with 3D printing at an accelerated pace
Unfortunately this innovation lingers somewhat behind even though the technology to print many different parts is readily available. It is high time to reach win-win agreements with suppliers about the use of intellectual property and revenue models (for example via Spotify for 3D).
5. Start spares parts pooling with affiliated companies and competitor colleagues
This matter is very sensitive in many industries, even though we are well aware that there is a lot of commonality between parts. Consider, for example, the petrochemical industry in the Rijnmond region or between the various public transport companies in Rotterdam, The Hague and Amsterdam. If this concept is widely used in aviation, why not elsewhere?
6. Reduce spares consumption
This is another measure that can influence internal relations critically. Our analyses often show that spares consumption cannot only be explained by failure patterns such as wear. The misuse and supplement of black stocks is also part of the consumption. Maintenance and Asset Management should be given incentives to keep spares consumption as low as possible.
I hope my suggestions can assist you in making your supply chain Corona-resistant and that we all see this virus disappear quickly. I wish you a lot of success in taking the right measures!