By Ben Schawe, Vice President of Manufacturing at Mazak
Every business and every consumer can provide their own unique examples of product delivery delays and cancellations resulting from pandemic-bred supply chain interruptions. As a provider of premium machine tools worldwide, Mazak is no exception. In the last two years, the time required to get machine tool parts from Asia to the U.S. has essentially doubled, and the delays do not end when the cargo arrives in this country.
Presently, backups in unloading ships combined with shortages of containers and the wheeled chassis used to transport them by highway are further increasing those delays. For Mazak, various model machines require different components, and maintaining sufficient part inventory for all of them can be a challenge. To overcome these challenges, Mazak has implemented multiple countermeasures to expedite component transportation and, ultimately, machine tool production to successfully meet customer demand.
To counteract the pandemic-driven interruptions of rail transportation, Mazak uses a tactic called diversion. Diversion involves trucking parts directly from the port of entry – typically the West Coast – to its plant in Kentucky. This shortens cross-country travel time from a week to three days.
Another approach is a “less than a container” (LCL) strategy where two smaller loads from different shippers are combined in one container. Yet another traffic-dodging method avoids the West Coast altogether and sends shipments through the Panama Canal to eastern U.S. ports. Extended time on the water is offset by reduced delays at the ports and the shorter highway trip to Mazak’s Kentucky facility.
Previously, ninety percent of Mazak’s manufacturing material came by way of the West Coast and ten percent via the East Coast. Currently, those percentages are reversed. For some smaller parts, airfreight is an alternative to dealing with custom and port clearances, COVID restrictions and other slowdowns. It should be noted that all of these workarounds involve a delicate balance between increased costs and the ability to meet customer needs in a timely fashion.
Within its Kentucky manufacturing operations, Mazak frequently adjusts its Manufacturing Resource Planning (MRP) system to reflect the abnormal and constantly changing supply conditions. System control typically extends over a five-month period, but adding together the delays in suppliers’ production, at least three months transportation time and simple unavailability of some parts requires new approaches.
One is accumulating “safety stock” – a cushion of excess part inventory intended to enable a manufacturer to maintain production volume as close to normal as possible. In many cases, the approach involves a best-guess, best case scenario. In some situations there might be on hand 90 percent of the material necessary to build certain machines. If the parts are in transit, and the broker guarantees they will arrive by a certain date, Mazak often takes the initiative to schedule production and trust that the needed parts will arrive in time to meet the tentative schedule. However, some components and some regions are experiencing more difficulty than others – electronics such as motors, stators, controls and IC chips are struggling, as are some key Asian shipping ports..
Mazak customers largely are sympathetic because they are experiencing their own versions of these same problems. It is for this reason that Mazak regularly meets with suppliers to find ways to cooperate and expedite product flow. The company provides suppliers with information and suggestions on how to overcome some of their logistical problems as well.
Some problems are impossible to solve quickly. For instance, major large parts like castings generally can’t be shipped by air, and most of those parts come from overseas suppliers. Other regional factors include labor conditions such as issues involving the longshoremen’s union and the threat of labor strikes. On the other hand, planned construction of computer chip factories in the U.S. should ease some of the shortages of those components, but the new plants will come on line in years at best.
In the last two years, Mazak has learned a lot about adaptability, flexibility and patience. Realizing it’s not easy for its customers to do the same, the company is continually working to find ways to overcome ongoing supply chain disruptions and get machines produced and delivered as quickly as possible for its customers.