Manufacturing supply chain outlook for 2022
Many industries share an ongoing, common pain point: the manufacturing supply chain. It’s a remarkable yet frustrating time, as many of us have great forecasts yet a slow down on the raw materials needed to complete the jobs.
Where we once received a common part in days, now we’re at up to 50 weeks – and most of the time, there’s no alternative part or workaround. That’s a challenge because we’re getting orders for the next three years where we used to get them six months out. While some are hopeful the supply chain will improve in the next couple months, we believe it will be our shared challenge for at least the rest of 2022.
Part of the supply chain issue is that many industries rely on semiconductor chips (almost everything manufactured these days has a chip in it!). The semiconductor chip demand will continue through at least 2025. What is typically a rollercoaster industry has turned into the tallest ride in the theme park.
The March 2022 Omicron variant Covid-19 increase in China will slow the supply chain even further as the tech hub city of Shenzhen shut down. Some predict this shutdown may negatively affect the supply chain worse than the Suez Canal disruption in 2021.
Fortunately, our customers are very understanding of the backlog of work, as no one can get all the raw materials and parts they need right now.
Lean manufacturing practices
Here’s what we’re doing to remain as effective as possible for our customers:
- We’ve always kept common parts and fittings in stock but we’ve doubled our inventory when possible (some parts are part of the supply chain problem).
- We added 20% to our production team in the last year with plans to add another 10% this year.
- Our Design & Engineering team dedicates much of their time toward automating processes on the production floor to increase and speed up output.
With in-house cross-training, we easily shift roles on the production floor, dependent on current needs. When one task is complete, our team members have the expertise to shift to the next. This practice reduces overhead and maintains quality.
While the supply chain challenge is currently a pain most of us share, we’re still elated that U.S. manufacturing is in an upswing and things look bright for the coming years. We think we can all say “Cheers” to that.