Energy and Smart Building Industry Blog

How Supply Chain Issues Interfere With Your Maintenance and Energy Projects

supply chain issues

From a facilities maintenance perspective, the supply chain works as a system that continuously delivers the services, materials, and parts needed to meet maintenance needs. Unfortunately, wide-ranging problems have interrupted the efficiency of the global supply chain and the flow of parts needed to maintain and repair facility assets.

The pandemic has resulted in industrial and manufacturing plant shutdowns for extended times, with rippling effects. Shipping costs have nearly doubled. Shortages of experienced truck drivers and warehouse workers have seen materials piling up in warehouses. Ships loaded with containers cannot unload cargoes because of port congestion. All of these factors disrupt business continuity and increase the cost of services.

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Impacts on Maintenance and Energy Projects

Sourcing Pre-pandemic

Before problems with the supply chain surfaced, maintenance teams could mostly rely on the availability of parts and plan ahead for required maintenance, upgrades, and the like. And planning ahead gave the advantage of procuring appliances, systems, and components from international markets via global sourcing at the best costs. In addition, global sourcing improved supplier selection and time-to-market. Rather than stock large quantities of specific parts, warehouses kept smaller inventories of parts and ordered replacements when necessary. Upgrades and repairs occurred according to schedules and within established timelines.

Before the pandemic, maintenance strategies also often involved single sourcing. With this practice, facility and purchasing managers identify one supplier that can provide quality, good pricing, and as-needed fulfilment of parts. Another strategy known as just-in-time service allowed companies to keep inventory levels low by matching production with specific maintenance and projects and prevented stock from becoming obsolete.

How the Pandemic Interferes with Sourcing

The problems with the supply chain have damaged once-dependable strategies of global sourcing, single sourcing, and just-in-time service. International-based manufacturers have lost the capability to support global fulfilment. The pandemic has exposed the risks of relying on a single supplier. And just-in-time delivery has suffered as suppliers cannot deliver products and components when needed and cannot meet the expectations of unexpected orders.

Navigating the current supply chain has required a change in maintenance and procurement processes. Without the availability of large stockpiles of parts, some maintenance teams have stretched repairs over more extended periods. Along with changing maintenance routines, upper-level managers have worked to build stronger relationships with manufacturers to determine and ensure the availability of genuine replacement parts. Because the availability of specific components or systems may not match the time when a breakdown happens, maintenance teams also seek substitute parts that closely match functional requirements.  

For example, facility managers may prefer to use a specific brand of monitoring, control, and automation systems because of the services offered through the system architecture and the interoperability of the control systems with existing software and components. Shortages of the preferred brand have prompted maintenance and procurement teams to use alternative solutions that operate within the specifications given by a manufacturer. Although the alternative solution requires changes in programming and management, the team can use the new solution to maintain customer satisfaction.

Ongoing shortages of critical components require greater lead times for repairs or replacements. In contrast to stocking parts for just-in-time repairs, maintenance managers and teams must pre-plan and create projections based on past repair histories. 

Manage Supply Chain Risks Through New Practices and Technologies

Relationships Can Be Critical

Several methods exist for managing supply chain risk. Developing long-term relationships with buyers, suppliers, and service providers occurs through identifying mutual benefits for all parties. Long-term contracts with suppliers can result in cost savings. Because a supplier understands the ongoing need for key components, improved supply chain performance can occur as suppliers seek methods for maintaining parts availability through negotiations with manufacturers. 

Supply chain compliance is a priority. Because of the potential of counterfeit parts entering the supply chain, maintenance teams must also learn to track the quality of parts and understand the need for purchasing certified ones. Suppliers must comply with quality, environmental, safety, and social responsibility standards. As a result, facility managers must also focus on cultivating relationships with vendors to ensure that onsite quality inspections occur and that a process for tracking the correct part from a qualified manufacturer to the vendor and warehouse exists. Good supply chain management also requires regular audits of international and domestic suppliers.

Big Data and Analytics 

Mitigating supply chain risk can occur by utilizing big data and analytics. Smart supply chain management optimizes the connectivity between systems and builds capabilities to respond to possible supply chain disruptions. The ability to implement end-to-end planning eliminates supply silos and improves supply response planning. Data exchanged between systems can verify supplier qualifications and track components from the supplier to the facility. Smart systems can sense that demand for components has exceeded forecast inventory levels. 

Problems with the supply chain have also prompted facility and energy managers to move from preventive maintenance routines to predictive or prescriptive maintenance. Leveraging the power of the IoT provides the flexibility needed to respond to service needs proactively to soften the impact of supplier shortages. Transitioning to predictive or prescriptive maintenance allows preplanning for repairs and establishes the lead time needed to obtain the correct part or system.

Customers demand comfortable working conditions and quick service. Innovative supply chain management for facilities requires a business planning approach that prevents disruption. Changes in management and maintenance processes improve overall decision-making and successfully maintain customer satisfaction and comfort.

Maintenance Program Options & Implementation

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