The COVID-19 pandemic has exposed many of the fragilities inherent within modern global supply chains. When supply chains function without disruption then everything runs smoothly. But, as COVID-19 has shown, a major event causes chaos.
And it’s not just major events that can prevent the smooth flow of parts and products around the world. Even in a relatively untroubled year, unexpected local or regional incidents, such as severe weather, cyber or terrorist attacks, tariff wars and Brexit, are all capable of having a disproportionate and potentially significant effect on supply chains.
The DHL Resilience360 Annual Risk Report 2020 highlighted the impact that fires and ground transportation disruptions had on the supply chain in 2019. These ranged from the Australian bush fires to a fire and chemical spill at the Intercontinental Terminal Company that caused long delays and cancelled deliveries being transported by freight vessels trapped in, and trying to enter, the Houston Ship Canal. Closer to home, political protests in Catalonia led to the closure of the border between Spain and France, preventing 20,000 truck movements, costing an estimated 15m Euros each day in supply chain losses, while a ransomware attack on a major tier 1 aerospace suppler in France led to around 1,000 members of staff being put on furlough for a month while production was halted, with a knock-on effect to customers and companies further down the supply chain.
Reassessing the nature of supply chains
One effect of the COVID-19 pandemic for many companies is going to be a major review of their supply chains. In particular, we’re going to see a continuation of the trend that was already emerging pre-COVID, of greater diversification, where OEMs and other companies at the head of the supply chain source from multiple geographies and supply chain partners, to spread their risk.
We will also see a growing movement to reshoring and nearshoring. Again, this trend was already apparent, being driven by the demand for small volume production, greater automation, ever-shorter lead times. In all likelihood, this trend will accelerate in the coming years.
The impact on plastic injection moulding
In many respects, we are ahead of the curve. Our investment in our 3D metal printing capabilities, such as our hybrid sintered metal additive technology, has been instrumental in helping us manufacture injection mould tools and injection mould tool inserts quickly and at a competitive cost in the UK.
This has led to a significant reduction in lead times for injection mould tooling, from months to just a few weeks, especially when compared with injection moulding projects where mould tools are being sourced from the Far East.
In addition, our investment in automation and robotic systems for many of our plastic injection moulding machines enable us to make significant improvements to cycle rates and thus output, for high volume injection moulding requirements.
We have also been working with customers to provide bespoke injection moulding services to support their UK and European production operations, often working to tight deadlines and lean manufacturing schedules. For our customers, these dedicated injection moulding services are proving far more cost-effective and resilient than the use of offshore suppliers, with the added advantage of far higher quality and simplicity of communication in the same time zone.
For plastic injection moulding companies, the reappraisal of supply chain models brought about by COVID-19 may have a significant impact, bringing fresh opportunities as customers seek to bring their sources of supply for injection moulding services and toolmaking closer to home.