For decades, business schools taught the lessons of Just-in-Time (JIT), or lean manufacturing, famously applied by Toyota in the 1970s and expanded around the globe from there. JIT showed that when companies coordinated orders of raw materials and components with their production schedules that they increased manufacturing efficiency and decreased waste.
JIT has proved itself a valuable concept in supply chain management—that is, if you’re not dealing with cross-border issues that disrupt availability of supply.
The sudden restrictions on products that were instituted during the pandemic are largely gone, but managing the cross-border shipping of manufacturing supplies continues to cause headaches in many C-suites. The concept of “free trade” isn’t mentioned much these days due to the restrictions on Russian trade and the U.S. tariffs on Chinese imports. And one can’t forget that components shipped from your tier one supplier may not be restricted, but parts from a tier two supplier could have problems at customs.
This is especially true in the medical device industry. Supply chain obstacles due to border restrictions affect not only profits, but also the end users of those products who need them for their own health and welfare. “With many goods, from electronics and medical equipment to clothes and furniture being made in China, it is difficult to maintain open supply chains as long as geopolitical conflict intensifies and economic and security risks are high,” writes Darrell M. West of the Brookings Institution.
Taking a Proactive Approach to Cross-Border Complexities
There’s no easy solution to fixing a problem that can keep a vital component in your supply chain stacked in a port warehouse for weeks. For visibility into the supply chain, many companies address cross-border complexities with trade management software that’s regularly updated with the latest import/export compliance information.
However, software is no guarantee that the slightest overlooked detail won’t foul up a cross-border shipment, delaying production and increasing costs. Ultimately, disruptions can be avoided by relying on your software combined with using your experience in importing and exporting products to identify those key details that could create a roadblock.
For example, while you may have determined that a component from Germany is better priced than those available from other countries, current data may indicate supply chain issues, pointing you instead toward a French component which, while more expensive, can be counted on to arrive when you need it. This analysis reflects the concept of the agile supply chain, using current data to balance what’s needed from suppliers with short-term forecasted projections. It also includes information such as supply chain kinks that may be affecting suppliers, as well as new cross-border regulations that can slow down delivery.
This approach is just as relevant for components that are already on order from a supplier when a new restriction threatens to impede the order. One of the rules of agile manufacturing is that as soon as that type of problem is identified, alternative suppliers are lined up that can fill in. The lesson in both cases is that leveraging your digital capabilities using advanced analytics will help your business respond more quickly and accurately to disruptions and keep your supply chain moving.
So will constant communication. As Omni Logistics’s Carlos Escorcia wrote in a recent issue of Supply & Demand Chain Executive, “When it comes to cross-border shipping, there is simply no such thing as too much communication.” In fact, proactive communication with onsite and remote management, suppliers, carriers, and border officials is the best way to avoid supply chain issues.
Developing an overall assessment of supply chain risks and focusing on where border restrictions might cause delays before they occur can prepare Med Device companies for possible disruptions. To assess your company’s own supply chain risks, start with Dynamic’s Supply Chain Risk Scoring self-diagnostic tool.