Agility in the supply chain | Occupational safety

0

Current shortages and inflation are getting worse and will not let up any time soon. However, while all manufacturers face challenges in their supply chains, not all are equally affected. Hanwha Techwin is weathering the storm better than others, for a number of reasons, writes Uri Guterman at Hanwha Techwin.

How did we come here? Of course, the effects of the covid-19 pandemic on production play a major role. Lockdowns around the world have led to a severe disruption in manufacturing, while demand for many products has weakened. And, when assembly lines reopened once again, huge demand for items such as microchips (and more) meant manufacturers were struggling to keep up. To make matters worse, shipping containers full of these manufactured goods sat for weeks in ports because there were not enough ships to transport them, workers to unload them or trucks to transport the goods.

Wider Challenges

There are other reasons that make the situation worse, including labor shortages caused by workers changing jobs, unique weather events that caused disruptions, and even a freak incident that saw the canal of Suez blocked for a week in March 2021. The war in Ukraine has added additional pressures and is behind challenges such as a shortage of everything from wheat and sunflower oil to, which is the more critical to industry, half of the world’s neon (used in chip manufacturing).

China under lockdown

And while much of the world is beginning to see some form of normalcy return, for many component shortages and supply chain disruptions will be a concern for some time to come. The reason? Large parts of China, including the major industrial city of Shenzhen, were locked down as recently as March, and many cities remain under strict lockdown as part of an ongoing “zero Covid” policy. Manufacturers with operations based there are clearly hampered as a result. As a Korean company with manufacturing based in Vietnam, we operate outside of China and have therefore not been affected as much as companies operating in the country.

Supervision and control

Although there has been a global shortage of electronic components during the pandemic, we have been able to adapt our products to account for missing materials and components and continue product production largely on track. Direct manufacturing also gave Hanwha Techwin more oversight and control of production during the pandemic compared to competitors who used third parties for production. Thus, we could ensure that our workers could work safely in the factory and that the production line ran smoothly. As a result, we are shipping 60-70% more units than a year ago!
Scale = agility
For manufacturers, each new challenge required a new approach. The most resilient supply chains therefore belong to manufacturers who can remain highly adaptable as situations change. Due to the size of Hanwha Techwin, we benefit from greater agility and our experience of over 60 years of industry leadership has given us a broader perspective than others in the industry. We can purchase materials in bulk well in advance, while our in-house R&D team can quickly redesign a specific product if needed, as raw material becomes limited.

Dated components

It should be noted here that in the wake of the pandemic, many manufacturers have invested significant sums in stocking their components instead of maintaining their product lines. While this might be a good tactic in the short term, it doesn’t help in the long run as it leaves manufacturers with increasingly outdated technology. As AI advances in the industry, having the latest components will make a significant difference. Superior AI is strongly driven by having newer and more advanced chips that enable onboard AI processing and the “heavy lifting” required.

Transportation

As I’ve shown before, the pandemic has made it difficult to ship products around the world. Sea routes between Korea and Europe have frozen. To overcome this, we have invested more in alternative transport, increasing air transport and special transport options (for example, in the United States, we have replaced rail transport with trucking). Although it cost us more, it allowed our customers and installers to continue to get the products they depend on.

Based on our values

When the going gets tough, it’s time to help each other out. Hanwha is rooted in “Challenge, Dedication and Integrity” and the spirit of “Trust and Loyalty” is part of everything we do. That’s why we’ve built resilience and agility into our supply chain and production lines, and that’s why I’m communicating all of this to you, our customers, partners and installers. We are committed to keeping the world moving – and that means planning for what we can control and having the adaptive capacity to react to events we cannot predict.

Share.

Comments are closed.