It has become a cliché to say that the coronavirus pandemic is posing an unprecedented challenge to global supply chains. Bearings are vital to the effective functioning of so many applications that supply chain management cannot be neglected for those who rely on them. Here, Chris Johnson, Managing Director at SMB Bearings, explains how best to ensure your supply chain delivers the bearings you need.
The potential of digital technology to improve supply chain management has been given added emphasis by recent events. Research by PWC Global found that those companies that had invested most in digital technologies discovered a 6.8% reduction in supply chain costs last year.
One technology in particular that has received a lot of media attention is the idea of a digital twin. Put simply, this means having a virtual replica of your supply chain - including products, facilities, vehicles and routes. Using the latest Internet of Things (IoT) technology, companies can feed data into the model in real time, spotting problems at the earliest possible stage as well as accessing accurate scenario testing. According to research by Gartner, of those companies using IoT, nearly two-thirds plan to use digital twins within the next year.
From the US to Australia, many countries are lamenting an overreliance on suppliers based in China and calling for a process of ‘on-shoring’, privileging local suppliers where possible.
A more pragmatic approach would be to focus on diversifying supply. As the saying goes, don’t put all your eggs (or bearings) in one basket. Having suppliers based in different locations means that a shock or crisis in one location is not going to immediately paralyse your supply.
Collaborative relationships between customers and their suppliers can also improve visibility across the supply chain. If your supplier shares information about their supply chain, you are better able to plan ahead and anticipate potential challenges. Most customers will accept some delays and disruption where this is unavoidable, but uncertainty is far more problematic.
There is little value in having a reliable supply of low quality parts. Bearings are so critical to the smooth functioning of so many applications, that compromising on quality will inevitably backfire in the form of unplanned down-time. At times when supply chains are more vulnerable, knowing that your existing stock is reliable and high quality is one way that you limit your exposure to the risk of supply chain disruption.
Unless you source your bearings directly from the manufacturer, it is also worth opting for those suppliers who are official distributors. If a supplier occupies this position, their stock and supply will be more reliable and you know you are eliminating the risk of counterfeits sneaking into your supply chain.
Effective inventory management is easier for those suppliers that have secured the right authorisations from regulators. Bonded warehouses give suppliers a big advantage here. A bonded warehouse or customs warehouse means a supplier can store goods without payment of import duty.
At SMB Bearings, we have both Customs Warehousing (bonded) approval and Inward Process Relief (IPR) approval, meaning we can store the bearings we import from places like China and Japan while deferring payment of import duty.
The duty is only paid if and when the bearings are sold within the UK or EU but if the bearings are re-exported to non-EU customers, no import duty is paid. Those involved in supply chain management and logistics use agreements like these to allow suppliers to hold larger amounts of stock without undue costs, allowing for much efficient supply and savings for customers.
Whether it is the uncertainties caused by Brexit or the disruption caused by global pandemics, by following the basic ideas outlined above you can help maintain a secure and reliable supply of quality bearings whatever your application or location.