How To Re-Buttress Your Supply Chain

Recent pandemic-era supply-chain disasters have underscored the importance of building resilience in crucial relationships. Dayna Badhorn, regional president of the Americas for Avnet, an electronic-components distributor, and consultant, advised attendees of the Chief Executive Manufacturing Leadership Summit in Detroit to shore up supply chains with these steps:

Rethink your strategy.

At a time when supply chains remain tenuous in many industries, Badhorn said, manufacturing companies can improve theirs and “turn it into a competitive advantage.”

Strengthen the chain.

First, “understand your design choices, including critical parts. Second, know where your suppliers’ supplies come from,” including raw materials. And third, “stay connected to all of your suppliers so you know where you have parts. Get a picture of your supply chain up and downstream; know where your parts are; move fast when you have to.”

Increase the stakes.

One way to ensure getting attention from suppliers in times of shortage is to become a customer for multiple components from them. “If you can design in three or four parts to a product instead of one part, you are more relevant in times of shortage to support,” Badhorn said.

Balance the “justs.”

Many supply chains “got too lean before the pandemic” after decades of perfecting just-in-time systems, Badhorn said. Now, some are turning to “just-in-case” levels. “Inventory isn’t [necessarily] a bad thing. But it’s expensive, and you have to weigh the consequences.”

Avoid complacency.

Remember the awful lessons of the disruptions of the past few years, and don’t “fall back into bad habits,” Badhorn said. Also, confront the real possibilities of future and potentially more frequent black swan events, such as a war between China and Taiwan that could choke microchip supplies severely.

Focus on critical components.

“Is there only one place you can get it, and does anyone else make it? You should be well aware of those parts and where they come from. And are there second sources out there? You don’t need all of them tomorrow, but you should start asking questions.”