Supply Chain

Planning for Brexit related upheaval

01/02/2019 22:37 | Share

An article in the Wall Street Journal (February 1, 2019) titled “Secret Truck Routes and backup Storage”, describes plans by one UK company, Heller Maschinenfabrik GmbH. The company gets 60% of its components weekly from suppliers across Europe, assembles it product and ships it to Germany. The company has purchased additional storage space, has plans to stockpile components, has plans for a secret transport route to avoid congestion in Dover and plans for additional staff. But all of this is on hold until the potential Brexit scenarios become clearer as they involve additional costs of over 150,000 pounds. Given the inability to pass on these additional costs, is Heller’s decision to stockpile components and remain in the UK the optimal decision or should the company make plans to move its assembly operations ? Should the company postpone any capacity expansion plans in the UK, as is has done in the past, until uncertainties are resolved ? Should Heller create an alternative source for assembly in Germany immediately and thus have other options to supply customers ?

Is the inability to source custom screws a reason why it is difficult to build iPhones in the USA ?

31/01/2019 16:21 | Share

An article in the New York Times (January 28, 2019) titled “A Tiny Screw shows why iPhones won’t be “Assembled in the USA”” describes the difficulties that Flextronics, Apple’s assembler of the high end Macbook Pro in Austin, Texas, faced in sourcing custom screws. The article describes their search for a supplier who could deliver 28,000 screws, and their option being a single supplier who could make at most 1,000 screws a week and took 22 trips to deliver the required volume. The claim is that such supply chain gaps make assembly of electronic products, which often requires design changes and quick delivery given the lean nature of the supply chains, difficult in the USA. But it also claims that availability of tooling engineers in China, and labor costs in China of $2.10 per hour, as additional reasons. Does the story of the difficulty in sourcing screws reflect poor inventory planning for components i.e., why wouldn’t Apple buy a large quantity of the required low cost components and decouple procurement from usage or is the sourcing difficulty valid given design changes ? Would assembly be easier if designers were constrained to use standard parts for low end items, such as screws, so as to alleviate the assembly bottlenecks ? Does Apple find assembling in the USA difficult because the supply chain is managed by Flextronics, Apple’s supplier, rather than Apple itself ?

Going Straight to the Sourcing

08/01/2019 10:52 | Share

This article defines strategic sourcing and how to implement it.

IN BRIEF | New Services & Solutions

08/01/2019 10:52 | Share

New supply chain services and solutions

Committing Head and Heart to Health

08/01/2019 10:52 | Share

Leadership profile of Chris Cassidy, president of global healthcare logistics strategy, UPS.

Load more