The year 2009 for thousands of companies was a disaster. Beset by sagging on non-existent orders, many struggled to hang on in hopes of better times. Many more fell by the wayside, and are no more, dragging millions of wage earners down with them. As orders flagged, inventories at countless stores, automobile, and equipment dealers, and OEM manufactures were burned off. THE SUPPLY CHAIN PIPELINE WAS EFFECTIVELY DRAINED! The manufacturing company I work for, fortunately, was among the ones who were able to hang on, hoping for better times. We laid off workers, pared back hours on managers like myself, and cut way back wherever we could in an effort to staunch the economic bleeding, and weather the storm.
Now, the worm has turned, and very rapidly. We are now in a perfect storm of a different kind. Orders have increased dramatically, and at velocity that is startling! The problem with this rapid turn-around has all to do with the fact that THE SUPPLY CHAIN PIPELINE WAS DRAINED over the course of 2009. In manufacturing, production cannot be turned off and on like a faucet. It is much like a super tanker. It takes considerable time to stop moving in one direction, and turning around to move in the opposite one. It cannot be turned on a dime. Rebuilding infrastructure, (employment), procuring raw materials from suppliers (who are in most cases going thru the same machinations), and ramping up production, is difficult at best, especially with longer lead-times for procuring those raw materials. OEM customers, however, are not really interested in those kinds of problems. They want their orders filled complete, and they want them on time. Allowing any interruption in assembly lines is almost a capital offence. In fact, they have turned late deliveries into a value stream for cash... A new term even coined for it... COPD!! Cost Of Poor Delivery. Monetary fines imposed for late deliveries.
It truly clarifies the old addage "feast or famine".
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