By putting to use hard-earned insights from previous global disasters, suppliers can prevent shortages and supply chain disruptions. New challenges, like the current global pandemic, require new approaches to risk management, including automating to mitigate possible labor shortages or disruptions.
The mid-2000s brought a series of natural disasters that exposed critical flaws in the supply chain. In 2004, the Indian Ocean earthquake and subsequent tsunami did major damage to Indonesia, Sri Lanka, India, Maldives, and Thailand. The tsunami is believed to have caused $10 billion in damages and losses, and led to delays on goods into and out of the region.
At the time of the disaster, the global supply chain should have taken note and developed contingency plans for potential future disruptions. Hurricanes Katrina and Rita wreaked similar havoc on the U.S. in 2005.
Fast forward to 2011: In the wake of the Tohoku earthquake and tsunami, the supply chain experienced shortages across many manufacturing segments, but especially the automotive industry; in fact, paint for specific colors of cars for Americans was impacted. One single factory in the world, in Onahama, Japan, near the Fukushima-Daiichi nuclear power station, produced the pigment used in automotive paint by most major auto companies(1). The tsunami caused the factory to shut down, producing a global shortage of pigment.
This disaster showed that auto manufacturers’ just-in-time (JIT) philosophy was flawed, and it also exposed the lack of a back-up plan. Visibility into automotive supply chains was limited to their first-tier supply base. Having visibility into a supplier’s value chain became a major topic of discussion around executive roundtables and boardrooms. Knowing your supplier’s suppliers should have become a mandatory process at that point.
The end-to-end supply chain is multi-tiered. As your tiers expand with product complexity, so must your visibility at the lower levels. Limiting visibility to your first-tier supplier can lead to severe supply chain issues. Your first-tier supplier sources components from your second tier – commonly known as the OEM manufacturer – who in turn sources from a supplier, making that source your third tier. Your second tier (the OEM) is a critical link in your supply chain to prove the validity of transparency.
In 2017, the U.S. had 15 natural disasters that cost more than $15 billion in damages and indirect losses. By then, U.S. businesses should have the best contingency plans in place to mitigate risks to supply chains. If there is a regional disaster, they can utilize sources from across the globe. If a disaster in Asia disrupts goods coming to the U.S., the U.S. can look to other, unimpacted global regions.
But what happens when there’s a global pandemic and the whole trade world shuts down? Does your contingency plan cover that? Regions of the world are reopening on widely varying timelines. Can your business wait until your supplier’s supplier is up and running? No industry or country was prepared for COVID-19...but can we learn from it, and use our learning to manage risk.
It’s nearly impossible to identify all risks in your supply chain – especially natural disasters and now global pandemics. Product delays are not the only issue; human capital is also needed to create and ship your product. The new “normal” of social distancing can be counter-productive in a warehouse or manufacturing facility where workers deliver parts to other workers. Do you have the human workforce or has the situation caused a shortage? Maybe you have the workers, but new guidelines(2) for social (physical) distancing and preventing person-to-person transmission cause delays and bottlenecks.
Automation offers a solution that works within these requirements. More specifically, an automated mobile robot (AMR) can serve as a runner between workers or an assistant to a human during a worker shortage, carrying raw materials, tools or finished products.
There are many AMRs in the marketplace. Some are designed to replace human workers while others exist to enhance human workers’ efficiency and production. While AMRs are agnostic to natural disasters and pandemics, most need to interface with your current WMS or ERP system and require humans with special skills to keep them up and running. If those human workers are affected by outside circumstances, those complicated AMRs can become useless.
A better solution is often a simpler one. A better AMR would not require highly skilled human workers to operate. It would run without a WiFi connection and still provide the powerful technology needed to move items and materials as needed to support production and eliminate bottlenecks.
MūL Technologies developed MARC (Mobile Autonomous Robotic Cart) to operate simply and efficiently — no WiFi needed. MARC’s sophisticated technology powers its movements, so it “sees” its environment and moves items easily without wasting valuable production time. Any human worker has the skill sets to work effectively with MARC, and MARC makes it easy to reduce bottlenecks and human work shortages, ensuring that your operations remain a strong link in the chain. Contact the MūL Technologies team today to explore how MARC can help support and strengthen efficiency in your operations.
SOURCES
1 Reuters, “Automakers face paint shortage after Japan quake”, March 2011
2 Social Distancing, Quarantine, and Isolation. (2020, May 6). Retrieved from https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/social-distancing.html