Evolution calls for new contingency plans

2009-12-24 10:02:05

New types of contingency planning are required if expensive supply-chain failures are to be avoided, according to Brad Brennan, managing director of Evolution Time Critical.

Today's best-practice analysis and contingency planning systems are no longer sufficient to prevent delays in deliveries, which in the auto industry can result in losses of up to EUR1m every minute if a production line has to be stopped.

We have clear evidence that failures are being caused by increasing production volumes that are pulling on already highly lean supply chains across infrastructures that are often also pared to the bone.

Our biggest concern is that many companies are relying on contingency planning techniques that are no longer sufficiently robust to provide guaranteed on-time delivery - take air charter as an example.

We were recently asked to solve a problem when a manufacturer accurately identified an issue with a large quantity of material needed to maintain production.

They had tried to implement their traditional contingency plan of air charter, but that day all the spare capacity in the region had been booked by a vehicle manufacturer with a pressing ramp-up problem.

The client's plan did not look at this next level of failure and the only solution they had been offered was to wait for an aircraft to reposition from an airport several hundred miles away after completing another delivery, adding a further four-hour delay.

In this instance, the Evolution team ascertained the arrival rate of product needed to maintain uninterrupted production and implemented a dual-mode solution.

A light aircraft was available at a smaller airport, so this was immediately chartered to carry a small batch of components that would increase the time window available for the main shipment to arrive.

A double-manned truck was then organised to deliver the balance of the shipment.

In another example, a customer awaiting urgent components that had been locked in a transit warehouse for the weekend Evolution had to use its industry contacts and spend hours trying to locate someone who could have the warehouse unlocked and help to recover the critical parts.

Evolution describes unforeseen problems such as these as 'second-level failures', where the planned emergency solution cannot be implemented.

The solution is to make emergency logistics planning more embedded within lean supply-chain analysis.

It's no longer enough to see emergency logistics as no more than a sticking plaster.

Vehicle manufacturers and their suppliers should be using the same analytical techniques that we use to look at all the scenarios to protect themselves from the potentially huge costs of a line stoppage.

Source: http://www.manufacturingtalk.com

related catagory Industrial News