Supply Chain Strategies for Building Resilience: Taking the Risk Out of Risky Business

BY: REBEKAH MCCARTER

As the world continues to recover from the economic impacts of the COVID-19 pandemic, supply chains everywhere are facing raw material shortages, long lead times (in some cases more than a year), higher material and transportation costs, labor shortages, and volatile pricing changing within days, rather than months. The impact of these challenges has trickled down to affect consumers, with 60% of Americans unable to get a product due to shortages in the past two months and 57% experiencing significant delays in receiving a product they ordered. Additionally, 83% noticed significant price increases because of disruptions in manufacturing, shipping and labor.

With these factors now hurting both businesses and consumers alike, it’s more important than ever to gain a deep understanding of the current state of supply chains along with the best solutions to each challenge.

BUY AMERICAN ACT REQUIRES MORE U.S.-MADE PARTS
In recent months, much attention has been given to President Biden’s new Buy American Act, which aims to increase the percentage of parts required to be manufactured in the United States for products or components purchased with taxpayer dollars. This immediately increases the required percentage from 55% to 60%, then raises to 65% in 2024 and again increases to 75% in 2029.

This will have both immediate and long-term effects on many manufacturers throughout the nation as they must seek out local suppliers to meet these requirements. Manufacturers are not completely alone in these efforts, however, as the Small Business Administration, Food and Drug Administration, Energy Department and several other agencies are supporting this initiative. For instance, the Small Business Administration has set up a new manufacturing office to help small manufacturers access contracts, financing and business development support.

MANUFACTURERS GET CREATIVE WITH PRODUCT DESIGN & ORDERING
In response to increased costs and material shortages, some manufacturers have had to get creative to continue making products and stay competitive. Some have reconfigured their product designs to eliminate missing components or have pivoted to produce components from different materials, while still meeting customer specifications. Others have created purchasing groups to buy in larger quantities to avoid materials expiring and to meet higher minimum order requirements, which have been largely cost prohibitive for smaller manufacturers. This adaptability and resilience have proven essential to keeping businesses afloat during these challenging times.

STRENGTHEN SUPPLY CHAINS WITH THE HELP OF TECHNOLOGY
Manufacturing technologies enable companies to tackle challenges from workforce shortages to efficiencies to preventative maintenance. These technologies also enable manufacturers to strengthen their supply chains, such as by using Additive Manufacturing/3D Printing to manufacture supplies in-house, deploying Automation to fill talent gaps, or digitally monitoring supply chains for disruptions using Artificial Intelligence and Big Data. When implemented effectively, technology helps manufacturers build and maintain more robust supply chains overall.

SUPPLIER SCOUTING SERVICES HELP IMPROVE AND EXPAND SUPPLY CHAINS
A main goal of many manufacturing companies right now is to build a more resilient supply chain. For most, this requires supplier scouting to find alternative suppliers. Whether a company is aiming to completely reshore supply chains, trying to find local suppliers to satisfy the requirements of the Buy American Act or looking to move from single sourcing to multi-sourcing, supplier scouting can help companies find the exact solution they need.

The State of Michigan provides support for supplier scouting through Pure Michigan Business Connect (PMBC) supplier summits and regional events that match buyers with potential suppliers. The Michigan Manufacturing Technology Center (The Center) continues to be a PMBC partner and offers assistance to any Michigan company, at no out of pocket expense, to help fill supply chain gaps. This work contributes to attracting, retaining and supporting Michigan businesses.

The Center also is part of the MEP National Network, which draws from a network of 1,400 manufacturing experts around the United States to help identify and recommend potential matches for vendors, materials or technical services.

This past year, these supplier scouting services have contributed:

• 115 searches conducted since October 2020 facilitating $2 billion in revenue in Michigan
• 94 items scouted nationally since May 2020 facilitating $105 million in revenue

Learn more about how The Center’s research experts can help with your supplier scouting search here or register for our upcoming Risk Management and Total Cost of Ownership for Supply Chain course on October 12 here. For more information on how The Center can help your company build a more robust supply chain, contact us at inquiry@the-center.org.


MEET OUR EXPERT

Rebekah McCarter, Lead Supplier Scout
Having spent more than 20 years with the Michigan Manufacturing Technology Center, Rebekah views her fundamental responsibility as head cheerleader and advocate on behalf of Michigan’s manufacturing community. Officially, Rebekah is the Lead Supplier Scout for Michigan, part of a national program that effectively identifies domestic suppliers that meet the specifications of OEMs and other U.S. manufacturers, with a special focus on connecting Michigan companies with other Michigan companies. If you are looking to mitigate risk in your supply chain, transition to more local sourcing of raw materials or augment your minority suppliers, The Center can help. 



Since 1991, the Michigan Manufacturing Technology Center has assisted Michigan’s small and medium-sized businesses to successfully compete and grow. Through personalized services designed to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.the-center.org.