Dealing with disruptions: how a just-in-time supply chain can fix disruptions

Eduardo Zepeda, marketing strategist for Hisco, explains how a just-in-time supply chain can fix the disruptions the industry is currently facing.

It's no secret that many companies struggle with supply chain disruptions and stock shortages in today's unstable economic landscape. Moreover, supply disruptions can majorly affect production for highly regulated sectors, such as the medical device industry. 

For example, the COVID-19 pandemic led to staff shortages and unprecedented demand for respirators and Personal Protective Equipment (PPE), among other critical products. In addition, the extensive review process of medical devices and products in this sector typically causes longer lead times for products to get approved and delivered, so even a minor disruption can cause significant delays. 

When Coronavirus first hit China, component suppliers closed and made parts for vital devices, such as ventilators, almost impossible to find. This affected small and medium-sized manufacturers causing critical cash flow issues, but even larger business suffered from the high demand-to-supply ratio. 

However, despite this climate of global economic uncertainty, suppliers like Hisco have not only overcome these production difficulties but also, thanks to their success, allowed their manufacturing customers to continue their operations and minimise the effects of supply chain disruptions. 

Disaster Recovery Success 

Although COVID-19 is perhaps the obvious reference on everyone's mind concerning disasters, other types of disasters may affect manufacturers. 

For example, disasters that impact systems like ransomware and other cyberattacks or those that affect premises like fires, burst pipes, or equipment failure are sometimes caused by natural disasters, typically leading to unplanned time. 

Unfortunately, estimating unplanned downtime costs, including equipment replacement, recovery labour costs, and lost business opportunities, can be challenging. However, along with Hisco's converting capabilities, their disaster recovery abilities allow manufacturing businesses to avoid long-lasting repercussions and respond efficiently, ensuring they resume operations as quickly as possible and minimise financial losses. 

This is achieved through value-added custom-converted parts for the medical device manufacturing sector and technical capabilities, such as their RFID solutions for inventory management. Hisco's RFID technology and software streamline production through real-time asset and materials tracking, providing maximum factory floor visibility for their customers. 

RFID is a sensor-based tracking system that provides accurate stock data with complete, real-time visibility and intelligent alerts. This technology helps eliminate supply shortages, track asset expiration and calibration schedules, and immediately provides notifications if an expired asset is used in production. 

Just-In-Time Supply Chain & Dual Source Supply 

The medical manufacturing industry also recognises Hisco for its just-in-time supply chain, which reduces delays and costs by perfecting the timing of ordering materials. 

The just-in-time supply chain is a proven method that moves material just before it's needed in the manufacturing process, reducing the levels of materials stored in a warehouse. This inventory management strategy increases efficiency and decreases waste by receiving goods, only as needed for production, reducing inventory costs. 

Hisco also offers dual source supply chain for critical products in medical device manufacturing. Dual sourcing benefits customers if one of their vendors has a manufacturing delay resulting from shortages in essential materials, malfunctioning production devices, or lack of skilled labour, which can all cause havoc on supply chain activity. 

A dual-source supply chain benefits customers by giving them more leverage to negotiate prices. The reason is that typically suppliers will not hesitate to increase costs, sometimes on a regularly scheduled basis.  

So, by having more than one supplier, medical manufacturers can purchase from the supplier, offering a more attractive price point, sometimes even forcing the other supplier to provide more attractive pricing to avoid losing business. 

Also, customers are covered if one of their vendors ceases operations or shuts its doors without warning. This situation often leaves the manufacturers stuck in quicksand until they find another vendor. So, by having a dual-source supply chain model, companies can plan to buy more from vendor B to avoid interruptions to their supply chain in case vendor A closes for good.