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Worldwide Supply Chain Challenge – What SENS is Doing

Leaders of manufacturing organizations have never in their careers experienced supply chain issues of the range and magnitude they are facing today.  Costs of all manufacturing inputs are increasing – materials, labor, and transportation.  Cost increases are impacting everyone, large and small, from athletic shoe companies to high tech electronics manufacturers.  There is no way to avoid cost increases as they are due to shortages in primary factors like semi-conductors, metals, and plastic feedstocks.  Cost increases must inevitably be passed on to customers.  But cost is often not even the biggest issue.  Parts shortages are.

“Cost increases must inevitably be passed on to customers.  But cost is often not even the biggest issue.  Parts shortages are.”

Sourcing of parts such that they arrive on time to fulfill shipment commitments to customers – which used to be routine – has for most manufacturing companies become a significant time sink for purchasing, engineering, and sales organizations.  Even the world’s largest product companies are temporarily shutting down production for lack of parts.  Many ports are clogged with container ships waiting to unload while empty containers take up port space.   There are shortages of trucks, container trailers, truck drivers, and warehouse space.  Factories producing widely-used electronic components, mostly in Asia, continue to face shutdowns from Coronavirus events.

There are no easy solutions, but there are steps companies can take to keep product flowing and reduce long lead times and late shipments to customers.

This blog describes some of the actions SENS has taken mitigate the impact of this worldwide issue on customer shipments:

Increasing Safety Stock.  SENS has been building up significant safety stock inventory of parts to guard against short term stockouts.  We keep safety stock at the part level so we can continue to configure products to order instead of building up finished goods inventory of predetermined configurations.

Two to Three-Year Material Planning Horizon.  SENS is now planning materials two to three years in the future to lock in supply of critical parts, doubling our normal planning horizon. We continue our normal practice of providing weekly updates for the first 26 weeks to help our suppliers plan their short-term production.

Multi-tier Supply Planning.  In addition to planning parts for our own suppliers, we are also working jointly with suppliers to ensure they are adequately planning with their suppliers.  This is a cooperative effort that our key suppliers have welcomed.

Expanded Supply Base.  SENS has expanded its Approved Manufacturer List (AML) both at the custom part and component level.  It’s normal practice to establish multiple sources of supply for parts, but in many cases, we have expanded approved sources to three or more suppliers.  We have also placed a priority on domestic and near-shore sources of supply to avoid the now costly and unpredictable international transportation system.  We only deal with offshore sources who stock supplies of our parts at U.S. based warehouses.

Microprocessor Flexibility.  Microprocessors are nearly always single-source components so dual source strategies aren’t a consideration.  But SENS has designed its newer products to be able to use multiple microprocessor versions within the same product family — with no compromise in product performance.  This provides sourcing flexibility should the standard version be temporarily unavailable.

Given the magnitude of current supply chain disruption, even the best planning and performance may not be enough to avert all product delivery issues.  SENS built its positive brand by designing and manufacturing reliable products, a high level of service, and reliable on-time delivery.  Our customers can be assured that we will continue to do everything commercially viable to continue to meet our high standards for every order.