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How to Overcome Logistical Problems with Dual Continent Manufacturing

Posted: Jan 20, 2022 2:00:00 PM

Are you struggling to overcome logistical problems brought on by multi continent manufacturing? This article will help inform you in managing your business and product 

The global supply chain has been drastically affected, in part due to the pandemic. From the storage and stocking of raw materials to the flow of consumer goods shipped overseas, every stage has been impacted.

As COVID-19 made clear, planning ahead is essential for managing supply chain disruptions. This is especially true for companies manufacturing and relying on product parts across more than one continent.

Some businesses have suffered great losses and have been forced to adapt to radical changes in consumer and market demands. In light of that, we'll cover how to overcome potential logistical problems faced by industries in dual-continent manufacturing.

First, let's start by outlining some of the core logistics issues dual-continent manufacturers face.

Raw Material Availability

Due to growing demand, the supply chain has to quickly respond to the fluctuating availability of raw materials. Needless to say, staying on top of this availability can be tricky.

Research suggests that this problem may correlate with an inability to adequately read and respond to subtle market signals. For example, how to accurately evaluate certain materials and the appropriate adaptive measures.

Inflationary Issues

Inflation is at an all-time high.

The US consumer price index saw a 6.2 percent growth in the fall of 2021, which is the sharpest annual rise in 30 years. We also saw the UK and Europe affected by this spike in inflation with an increase of 4.2 and 4.9 percent, respectively. These statistics reflect the logistical problems related to COVID-19, labor shortages, and production issues.

For example, let's look at the Freightos baltic index. This covers 80 percent of the global container trade. Thanks to container scarcity, the cost of shipping rates has risen exponentially over the last year—over $3,000 to be exact!

Moving goods between continents has become particularly challenging. This has resulted in higher costs across the supply chain and fueled the rise in inflation.

Companies Going Out of Business

Many companies face the danger of obsolescence due to failings in the supply chain. This is, in part, a result of COVID-19 and a systemic problem that long existed in the global supply chain. Ultimately, the current global logistics model is inefficient. 

The logistics industry has been crippled by:

  • High transportation expenses
  • Labor shortages and decline of productivity
  • Overseas manufacturing delays
  • Inability to adapt to new technology

To name but a few issues.

Logistics Planning and Strategy

To counteract these problems, businesses need better, longer-term ways to prepare for worst-case scenarios. That way, companies are better positioned to make appropriate accommodations.

Safety Stocks

Although buffer stocks are one solution to potential supply chain disruptions, companies also have to account for:

  • Extra storage costs
  • Change in demand
  • The overhead expenses of excess stock

A better solution is partnering with suppliers who cater to disruptive market tendencies. For instance, those with better means of managing manufacturing variability.

Suppose a supplier has more than one manufacturing location. In that case, they may be better able to negate logistical problems with shipping between different countries. For example, different locations may not be subject to the same regulatory and legal restrictions as others.

It might also be worth taking a holistic look at your tracking systems. i.e. What happens in the event of damage, loss, or theft to your stock?

By cutting losses in this way, you can also get better estimates on your inventory. But, this will mean investing in a partner that can better track your merchandise.

Increasing Lead Time

As mentioned, poor lead time can happen due to:

  • Lack of raw materials
  • Disruption to transportation
  • Labor shortages
  • Natural disasters
  • Human error

Companies may be able to improve lead times by implementing automated stock replenishment. This often requires companies to invest in better predictive and analytical technologies. For instance, AI and machine learning software.

These technologies can automate distribution and shipping operations, enhancing productivity. For example, companies can opt for just-in-time (JIT) strategies to forecast product demand.

This enables a company to receive goods closer to when they are actually needed. This software can also analyze market trends to anticipate shipment delays more efficiently.  When there are anticipated delays, such as we've seen, companies may need to increase their expected lead times and order sooner than ordinarily needed.

Communications

Communication factors into many elements throughout the supply chain. From protecting long-standing customers, supplier relationships, and communications within the company itself.

Frequent and open communication between suppliers and customers is more important than ever to ensure that all are in the loop in case challenging supply issues arise. Businesses should keep in touch with suppliers to see if there are expected shortages so they know the optimum ordering time. Suppliers can reach out to their customers to see if they have any upcoming initiatives so all are prepared for upcoming orders and any obstacles can be avoided.

Effective communication will also help improve staff relations. Not to mention, potentially attract talent that's interested in companies with better comms systems. After all, Logistics Management magazine highlights that there simply aren’t enough skilled supply chain managers to go around.

As such, attracting high-quality employees through your communication efforts could give your company a competitive market edge.

Value of Products

This also factors into more sustainable approaches to product design and manufacturing. If the product is of better quality and value, it will last longer.

This can decrease the demand for the product in the long run if they aren’t required to be shipped as often.

Estimates have shown that the green tech global market volume has already exceeded $4.5 trillion and continues to grow. The same predictions indicate that the industry will yield better:

  • Efficiency
  • Costs
  • Product design
  • Manufacturing stability

What’s more, research by McKinsey has made several predictions about how these technologies could revolutionize logistics, from electric transportation to cheaper energy costs.

Are You Ready to Overcome Your Logistical Problems?

As a dual continent bearing manufacturing corporation, Hartford Technologies has the capabilities and capacity to supply the same broadest range of standard and custom bearing and ball products for manufacturers on every continent. Contact us today to see how we can help manage your logistical problems for manufacturing.