The famous quote is, “Take care of the inside, and the inside will take care of the outside.” In today’s supply chain realm, this means getting internal design and manufacturing capabilities in order to work more effectively with external supply chain players.
Mike Berg, senior business development manager at Panduit Corp., reports it sells exclusively via distributors, which affects its manufacturing approach, and impacted its response during the pandemic and after.
“Shortages of raw materials from resins to stainless-steel during COVID-19 made it complex to produce and harder to deliver products,” says Berg. “So, we immediately focused on supply chain continuity and over-invested in raw materials by maintaining multiple supply sources. We also expanded production capacity to provide the products most critically needed by our customers, and those efforts continue today.”
Roll your own relationships
One lesson Panduit learned and adopted as a strategy was working with distribution, and refocusing by region to prioritize availability of high-demand products, such as its higher-performing data jack connectors, patch cords, and communication cables. These and similar items are typically crucial for keeping critical maintenance projects going, especially as increased remote work during COVID-19 fueled the need for more networking.
“Many supply disruptions started from resin and metal shortages, which are the basis for so many products. Panduit had the advantage of vertical integration, producing many of the final assemblies and subassemblies for our products, while also having internal design and manufacturing resources,” says Berg. “This allowed us to reach out globally to many resin and metal suppliers, identify new materials, and quickly qualify the second or their source materials. While there were still struggles, we were described as the ‘best of the worst’ by our distribution partners in rising to meet customer orders. Vendors relying more on an OEM or ODM suppliers experienced much more unpredictable supplies.”
Friends with better options
Even though supply chain stresses and uncertainties have pretty much abated, Berg reports that suppliers, distributors, system integrators and end users are not only communicating more often, but are also collaborating more closely, developing closer working relationships, and seeking new partners with those abilities.
“We all want to own our destiny, so we look at what we can control. Many customers are examining suppliers and distributors’ capabilities for better solving supply chain issues, such as checking if they have increased regional manufacturing and distribution. This is an advantage for us, but it may also help users to have greater sourcing options locally,” explains Berg. “Customers remember who their friends were in a crisis, but they also remember who had the best options. The lesson is to not take process capabilities for granted, have multiple available options to support ongoing projects and operations, and make it part of evaluating what suppliers can provide.
Beyond the simple transactions of the past and recent supply chain issues, Berg adds that OEMs, system integrators and end users are seeking suppliers and distributors that can assist them with other efforts, such as sustainability strategies and longer-term project lifecycle services. “There’s less in-house expertise available lately due to job shifts and increasing retirements after COVID-19, and even the best system integrator can’t do everything, so more suppliers are trying fill these gaps,” says Berg. “What’s happening now is a generational shift and it’s changing what support users require during the lifecycle of their equipment, processes, and facilities. This begins with manufacturers and suppliers providing technical specialists, who can support users more closely. And Panduit can also better enable systems integrators to do network assessments, and make digital transformation designs available.”