Ben Machine’s Supply Chain Disruption Strategies
Purchasing managers across industries in Canada and beyond have been truly challenged by the supply chain disruptions brought about by the 2020 global pandemic. With clogged ports causing delays, hikes in raw materials threatening bottom lines, and break downs in established reliable supply chains, it may feel like things will get worse before they get better.
Supply Chain Issues Facing Our Manufacturing Sectors
Across Canada and the US, our manufacturing sector relies on commodities such as aluminum, copper, steel, nickel, and zinc. As global economies recover, we see that the healthy increases in consumer demand are also causing a natural increase in prices. However, some less well understood weaknesses in commodities industries are highlighting unanticipated fragility in our economic recovery.
Take copper as an example. Copper is used extensively in the Military and Defense Industry for components and equipment that require electrical and thermal conductivity and dissipation. Unfortunately, copper mining has suffered a chronic underinvestment in the past decade, and this is contributing to skyrocketing prices for manufacturers. Copper prices have increased an incredible 21% just in the last year. It will take many years to add the copper production capacity needed to meet this surge in demand. Until then prices will remain high.
Demand for finished products is highest in North America, and the raw materials are sourced often from Asia and South America. The increased demand that a recovering economy produces has resulted in increases in shipping costs. Geo-political uncertainties are pushing up commodity prices. Chile is one of the world’s leaders in mining copper, but their political issues could pose a risk to copper output.
Ben Machine’s Risk Mitigation Strategies for Supply Chain Management
As a leading solutions provider to industries such as Military & Defense, High Tech Commercial and Medical, Ben Machine realized early on that the long tail risk on this global pandemic would require careful planning and a proactive set of actions. Managing pandemic uncertainty to protect customers from materials stock outs and spiking prices meant protecting their customer’s ability to keep citizens safe, healthy and employed.
In recent months Ben Machine’s leadership implemented critical risk mitigation strategies such as verifying supply chain quality and forecasting forward demand to protect their customers, avoid bottlenecks, close gaps between bookings and shipments, and minimize price spikes.
Ben Machine’s Proprietary Material Management System
Ben Machine’s Material Management System employs AI to forecast future demand. Using this system, Ben Machine was able to forecast the impact of shortages on production. By analyzing recent trends in supply and demand, and estimating future demand forecasts, potential shortfalls could be identified and addressed. Ben Machine used their materials management system to maintain their exceptionally high On-Time-Delivery rate by identifying potential bottlenecks or gaps between bookings and shipments.
As a leader in end to end manufacturing solutions and experts in precision CNC machining, Ben Machine requires metal commodities that are facing price spikes for their manufacturing processes. Their forward-looking risk mitigation strategy enabled Ben Machine to make strategic buys in these raw materials, purchasing prior to the price spike, and in quantities sufficient to protect their customers from commodity price volatility now and into the foreseeable future.
The Value of a Nimble Supply Chain
Early on in the pandemic, Ben Machine saw that supply chain risk would present a formidable challenge to their business, and to their clients. The planning team monitored the supply and demand landscape, while taking quick steps to protect its skilled workforce, maintain operations, and keep orders shipping out the door.
As the pandemic moved through phases, with the resulting turbulence across global economies as well as on the home front, Ben Machine implemented these and other risk mitigation strategies, empowering their team to make responsive, responsible decisions all without sacrificing the quality of their product or their relations with customers and suppliers.
From Ben Machine CEO Michael Iacovelli: “We are proud to be a stronger more resilient partner to our customers as a result of this global pandemic.”
Read about our partner Macfab’s experience with supply chain disruption:
https://macfab.ca/blog/the-macfab-experience-solving-manufacturing-challenges/
