balance supply chain

New Markets and Expansions Require Insight and Expertise (Part 1)

Your LEAN supply chain is a delicately balanced operation. Each component is a known entity with quantifiable and interdependent links. Once established, balance is maintained with a degree of elasticity that copes with irregularities, delays, hiccups, and outright failures through exception management. With accurate forecasting, timely information, and 3PL partners that understand your business and overall goals, the built-in flexibility can handle these normal events.

But what about large events that go beyond “normal?” Expansion into new markets? Significant increases in production? Opening a new plant, closing a plant, or reallocating production from one to another? What happens when your supply chain has to stretch more than “normal” flexibility can handle?

One of India’s largest motorcycle manufacturers found out. Even as Royal Enfield rapidly doubled production capacity they were a relatively small customer for their suppliers. Higher-priority customers took precedence, and Royal Enfield’s customer wait times didn’t improve as desired. Capacity did not equate to capability.

An interview in SupplyChainBrain with a measurement and automation company, discussed the challenges of setting up a new production facility in Hungary. A significant issue was a months-long delay in adapting sourcing into the new location, forcing continued reliance on existing sources. It’s interesting to note the focus of the interview was the company’s introduction of a global information management platform that gave them increased visibility and planning capabilities which they could have used before opening the plant in Hungary.

These examples demonstrate the need for business intelligence and the value of a logistics partner who can anticipate the effects of change. Imagine a scenario where a manufacturer develops an overseas market for the first time. In addition to the woes ABOVE, there may be delays due to unfamiliar or unexpected documentation. If the product is perishable, will shipments have to be smaller and more frequent to that distant market? Will the complexities of additional transport modes include misapplied charges? These are just a few of the questions that an experienced LEAN 3PL would anticipate and provide solutions for a sustainable supply chain.

Subscribe to Transportation Insight’s Blog to discover more about supply chain challenges and the valuable solutions a forward-thinking 3PL can provide.

No Comments
Post a Comment

Your email address will not be published. All posts are moderated.

* Required field