Countering disruptions

Every business and consumer can cite unique examples of product delivery delays and cancellations resulting from pandemic-bred supply chain interruptions. As a provider of premium machine tools worldwide, Mazak Corp. is no exception. By the second year of the pandemic, the time required to transport machine tool parts from Asia to the United States essentially doubled, and the delays do not end when cargo arrives in this country.

Backups in unloading ships, combined with shortages of containers and the wheeled chassis used to transport them by highway, further increased those delays. For Mazak, various models of machines require different components, and maintaining sufficient part inventory for all of them can be a challenge. To overcome this, the company has implemented countermeasures to expedite component transportation and, ultimately, machine tool production to meet customer demand.

To counteract pandemic-driven interruptions of rail transportation, Mazak has used a tactic called diversion. It involves trucking parts directly from the port of entry — typically the West Coast — to the company’s plant in Kentucky. This shortens cross-country travel time from a week to three days.

Another approach is a “less than a container” strategy in which two smaller loads from different shippers are combined in one container. Yet another traffic-dodging method avoids the West Coast altogether and sends shipments through the Panama Canal to eastern U.S. ports. Extended time on the water is offset by reduced delays at the ports and the shorter highway trip to the facility in Kentucky.

Previously, 90% of Mazak’s imported manufacturing material came by way of the West Coast and 10% via the East Coast. Currently, those percentages are reversed. For some smaller parts, airfreight is an alternative to dealing with customs and port clearances, COVID-19 restrictions and other slowdowns. It should be noted that all these workarounds involve a delicate balance between increased costs and the ability to meet customer needs in a timely fashion.

At its manufacturing operations in Kentucky, Mazak frequently adjusts its manufacturing resource planning system to reflect abnormal and constantly
changing supply conditions. System control typically extends over a five-month period, but adding together delays in suppliers’ production, at least three months of transportation time and simple unavailability of some parts requires new approaches.

One is accumulating “safety stock,” a cushion of excess part inventory intended to enable a manufacturer to maintain production volume as close to normal as possible. In many cases, the approach involves a best-guess, best-case scenario. In some situations, 90% of the necessary material might be on hand to build certain machines. If the parts are in transit and the broker guarantees they will arrive by a specific date, Mazak often takes the initiative to schedule production and trust that the needed parts will arrive in time to meet the tentative schedule. However, some components and regions have been experiencing more difficulty than others. Electronics, such as motors, stators, controls and integrated circuits, are struggling, as are some key Asian shipping ports.

Customers largely are sympathetic because they have been experiencing their own versions of these same problems. It is for this reason that Mazak regularly meets with suppliers to find ways to cooperate and expedite product flow. The company provides information and suggestions to suppliers on how to overcome some of their logistical problems as well.

Some problems are impossible to solve quickly. For instance, major large parts like castings generally can’t be shipped by air, and most of those parts come from overseas suppliers. Other regional factors include labor conditions, such as issues involving the longshoremen’s union and the threat of labor strikes. On the other hand, planned construction of computer chip factories in the U.S. should ease some of the shortages of those components, but the new plants will come online in years at best.

In the past three years, Mazak has learned a lot about adaptability, flexibility and patience. Realizing it’s not easy for customers to do the same, the company continually works to find ways to overcome ongoing supply chain disruptions so machines are produced and delivered as quickly as possible.