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Overcome logistics hurdles, reduce lead times

Aug. 24, 2022
System integrator Interstates reports, even if some products are more available, getting them delivered requires creative solutions
Read more about the supply chain

This article is part of a series about the automation supply chain. Read more on the topic here.

Greater availability of some products is welcome news, but they can’t provide any actual benefits until they’re delivered at less-than-prohibitive rates for the products and transporting them. Stan Spaulding, supply chain director at Interstates, reports that commodity items became more available in the last several months, and that the system integrator in Sioux Center, Iowa, hasn’t seen the same shortages as it did last fall and during much of 2021. Interstates is a certified member of the Control System Integrators Association (CSIA).

“Commodities made of base metals and composites that are simple and stored in bulk are available. This includes copper wire, aluminum, steel and PVC conduit, and some electrical materials,” says Spaulding. “However, anything that needs microprocessor chips or requires complex assembly, such as circuit boards, breakers, I/O cards, motor control centers (MCC), PLCs or other automation and control products still have extremely long lead times. We can expect 10- to 20-week lead times, or even up to 40 to 60 weeks, especially if those items come from Asia or Ukraine.”

Spaulding adds there are several strategies that end users, project manager and other system integrators can use to mitigate supply chain delay and other problems. These include:

  • Designate someone in the organization, or a team for larger organizations, to be dedicated to handling and resolving supply chain issues;
  • Develop designs and plan projects further ahead;
  • Work with clients to make them aware of delays, and manage their expectations to reduce unwelcome surprises;
  • Even of a design isn’t done, order materials that are likely to be used, but can still be placed on hold until they are needed;
  • Be more aggressive in ordering ahead—go from just-in-time inventory to just-in-case inventory;
  • Standardize on parts and products, so there will be fewer specialized part numbers, and so that more items can be used by other projects;
  • Cultivate by-name relationships with suppliers and other partners, so everyone will be more likely to help each other deal with today’s increasing crisis situations; and
  • Maintain constant communications between all players.

Even if raw materials, parts and products are available, Spaulding adds that transportation and logistics expenses are also causing new hurdles and delays. “We’ve seen a 40% increase in freight and shipping costs via sea, air and ground,” explains Spaulding. “Much of this is driven by Europe’s dependence on Russia’s oil and gas that’s caused fuel prices to escalate. It’s also due to high demand for freight and a shortage of 60,000-100,000 truck drivers in the U.S. Freight constraints coupled with component availability have had real impacts, such as lead times that are four to five times longer than normal. Today, we have to wait more than 100 days for PLC components that our suppliers used have in stock. Standalone switchboards for electric rooms that we used to get in eight to 10 weeks are now taking 40 to 50 weeks or more, depending on the manufacturer and the breakers used in the switchboard.”

Plan ahead, work ahead

To keep projects going despite these delays, Interstates works with clients to start earlier, order sooner and undertake more projects at the same time due to project durations taking up to 25-40% longer. This allows them to switch between more projects to make better use of their engineering time. “We do electrical installation of available items, perform software programming, and then wait to add items that have been delayed,” says Michael De Boer, automation director at Interstates. “We’re also staging projects differently. Now, we’ll do programming, software updates and data analytics sooner, and phase in physical components when they become available. This takes more planning by everyone, especially when coordinating with plant shutdowns. However, everyone is happy to keep working, even if scheduling is difficult.”

Spaulding adds that Interstates is buying ahead on items it’s certain to use in the future, even if they haven’t been assigned to a specific project yet. “We’re also constantly seeking alternative, authorized sources for components, but this makes tracking even more crucial,” says Spaulding. “We’ve also started using Remarcable software for managing orders, but we can’t only rely on what a computer spits out. We still track many orders via manual emails and telephone calls, and many clients often want to talk with a real person to learn about other factors affecting their supply chains, or to consider alternative products.”

About the author: Jim Montague
About the Author

Jim Montague | Executive Editor

Jim Montague is executive editor of Control. 

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