Current Australian Manufacturing Supply Issues… and Mitigation
The pandemic has impacted Australian manufacturing in several ways, most notably with major supply chain issues leading to shipping delays, soaring transport costs and a significant shortage of – and subsequent price leap in – parts and raw materials.
This of course has a flow-on effect to customers in terms of pricing, potential project delays and final production costs… but the news isn’t completely dire. Whilst customers are currently feeling the impact of this disruption, Romar Engineering is working to help mitigate problems over the long term.
In the interim, we explain here just what’s happening, why supply chains are being impacted so severely and how we plan to leverage our expertise to help mitigate supply chain issues in the future – with technology, expert design for manufacture and robust, globally oriented manufacturing solutions.
Major supply chain disruptions
Currently, every industry around the globe is feeling the impact of supply chain disruptions. Through the pandemic, port closures became commonplace, often at short notice – and the fallout was widespread.
Not only did it lead to long container queues, the flow on effects included major perishable stock losses, sudden unavailability of parts and materials, staffing shortages, soaring costs – some raw materials have tripled in price – and a severe lack of shipping containers or any suitable transport.
Here in Australia, soaring shipping costs have hit importers and exporters hard, with cargo container hire doubling and sometimes almost tripling in price.
International ports that have closed through the pandemic have also faced huge financial losses leading to job cuts, a lack of maintenance and a halt in further shipping production.
With no new containers and current shipping still facing delays of weeks or sometimes months entering and exiting China and the US, it’s led to severe losses across multiple sectors.
Underlying supply chain problems
While the pandemic has directly and severely hampered supply chains, some suggest it has merely highlighted underlying issues, including reliance on just-in-time delivery and low supplier diversity.
There was a further illustration of the fragility of our international supply chains in March, when the Ever Given container ship became wedged in the Suez Canal for six days, blocking hundreds of ships behind it. With roughly 15 percent of world’s shipping traffic transiting the canal, Lloyd’s List estimated that the blockage disrupted US$9 billion worth of goods daily.
The recent 26th Annual Third-Party Logistics Study, by Japanese company NTT Data, incorporated data and interviews from almost 350 companies. It uncovered critical issues faced by logistics managers worldwide due to the pandemic and highlighted existing problems with widespread reliance on long supply chains and vulnerabilities in sourcing strategies.
The report’s key recommendations to limit potential future disruptions included the adoption of technology to streamline processes and supply chains. It suggested increased use of smart technology such as 3D printing and IoT data analytics will assist by creating more agile supply chains, and by providing logistics and manufacturing managers with increased visibility, control and manoeuvrability at each stage of the chain.
Mitigating supply chain issues
At Romar, we are already working to help mitigate supply chain issues. We have invested in technology including niche 3D printers and Industry 4.0 manufacturing to streamline processes – and provide customers with enhanced, on-time manufacturing solutions.
Whilst there is no way to control global material and shipping prices, one way to assuage these costs is with tailored design for manufacture.
At Romar, our team of engineers and materials experts can provide full analysis of your design, factoring in requirements including functionality, durability, aesthetics and consistency of performance.
Using techniques such as finite element analysis, we can modify designs for enhanced performance whilst simultaneously looking at ways to decrease material wastage without losing structural integrity.
Effective and thorough analysis through the design for manufacture stage increases cost-efficiency at every subsequent stage of production plus end-product performance.
Providing quality, turnkey solutions
As the pandemic has clearly illustrated, reliance on long supply chains can be hugely damaging for local businesses.
COVID-19 has also shown the importance of local manufacturing solutions that are internationally competitive.
By choosing an Australian manufacturer, you can help shorten supply chains, save costs on inbound and outbound deliveries and avoid lengthy production delays.
A fully local supply chain is also the best way to ensure your project meets Australian safety and quality standards, and as a turnkey manufacturer, we can oversee every stage of production – including materials selection, design for manufacture, commercial manufacture and logistics – to ensure you have an efficient and cost-effective project.
Outstanding Australian manufacturing
Romar has worked hard during the pandemic to consistently provide robust and cost-effective solutions for our customers.
We have a world-class engineering team, and niche and wide-ranging capability across areas including advanced manufacturing, medical device manufacturing, silicone products, elastomers, precision molding and additive manufacturing.
To discuss how we can help you through and beyond the pandemic, please contact us.