Disruptions with post-pandemic supply chains have become a burning issue within many sectors, and in particular for manufacturers.
Fear of Running Out (FoRO)
We can all readily recall last year at the start of the lockdown, the cringe worthy toilet paper hoarding on a global scale – and whether you personally participated in that arguably moment of madness or not – a trait of human behaviour (Fear of Missing Out) or ‘FoMO’ was undoubtedly the underlying factor. Relating that same mind set to supply chains, many companies and their procurement individuals or teams are suffering from ‘FoRO’ (Fear of Running Out). But in their defence this is more likely to be in response to real shortages, rather than panic buying.
Manufacturers rely upon (potentially, many tiers of) supply chains, which ultimately give them the ability to make their products. This could include basic raw materials through to individually made complex components, as in the case with Westbury. To explain in basic terms, a control panel consists of many parts; some specified by customers, as well as more generic consumables, which are often held in stock. Every control panel at Westbury has a Bill of Materials (BoM), which will comprise all of the constituent parts, as agreed with the customer before it enters planning and then production.
A Westbury Picking List: stores prepare a comprehensive ‘kit of parts’ for the control builder to wire and assemble, derived from a signed off Bill of Materials (BoM).
Planning and production: within each trolley load, are picked electrical components (e.g. controllers, HMI’s, breakers, drives, switches) in readiness to build a Westbury control panel.
Having survived the economic turndown of the lockdown, Westbury has faced a new challenge – managing or ‘re-managing’ its supply chains. Peaks and troughs in demand, lead times and trading restrictions have had (and continue to do so) an impact on the availability of parts from many of our wholesalers and distributors. In particular, Westbury like many other manufacturers, has suffered from a global shortage of ‘microchips’ as also widely reported in the media, effecting many well known manufacturing brands, like electrical car maker, Tesla. “Fear of running out is causing every company to over order – like the toilet paper shortage, but at an epic scale,” wrote Elon Musk on Twitter (June, 2021).
Westbury stock over a thousand lines of ‘consumables’ – these are items which are most commonly used across all of kinds control panel building.
Westbury has always enjoyed the benefits of strong working relationships with its key partners and suppliers, such as Schneider Electric and Rockwell Automation – but unfortunately, these electrical manufacturers, and their related wholesalers / distributors have also suffered from ‘fits and starts’ with their own supply chains – unavoidably passing on the disruption to its customers, including Westbury. To overcome this, Operations Director, Paul Knott describes a proactive change in approach: “Westbury have encouraged openness and collaboration with working relationships – so for example a Teams meeting may include the customer, and our related supplier in order to effectively communicate and overcome production issues, such as delays in providing components to the shop floor and the impact that may have on delivery times.” He adds: “If we’re transparent, customers are much more understanding of set backs, which invariably we have no real control of.”
A Westbury engineer utilises Manufacturing ERP software to compile a BoM which is checked and signed off with the customer, in readiness for production.
To improve efficiencies and to compensate where possible for these difficulties, Sebastian Di Cataldo Westbury’s Finance Director highlights the need to adapt: “Westbury have responded well to each situation as it presents itself by employing various means, including seeking alternative sources, retaining greater stock levels of the broader lines as a contingency – all achieved without detriment to the business’ cash flow. Another practical step we have taken is to also offer concession invoicing; whereby control panels are despatched, almost complete, invoiced accordingly and then the final components(s) are sent out separately for either the customer or a field engineer to fit by prior arrangement. Practical measures like these ensure that customers, and indeed their customers have less disruption and an improved chance of keeping to their respective deadlines and timescales. Importantly, our approach becomes the anecdote for the commonly described ‘FoRO’ (Fear of Running Out) condition. FoRO has naturally had an impact on how electrical distributors prioritise their customers sales – in effect rationing their clients based on real needs to satisfy orders, rather than those building up reserves, which only exasperates the ‘fits and starts’ problem. With the advantage of well established, long-term relationships with suppliers, Westbury often benefits from being a prioritised customer, which is in turn passed on through its own working relationships with its customers.”
Glynn Westbury, Managing Director explains his frustrations: “The main difficulty is the uncertainty of it all – often the shortages are random and so difficult to predict. Without a reliable level of anticipation, some of it is admittedly guess work, which can have a negative impact on confidence for all parties involved. However, our view is whenever possible for Westbury to take strong ownership of these issues, before they become a greater problem. Our main advantage is that we are suitably sized to be flexible and dynamic, which some of our competitors have struggled with, and as such, have lost work to us over this very challenging period. All we can do is keep learning, improving and coping with the conditions many UK manufacturers found themselves in, with the objective to still make good on our reputation by delivering on-time a reliable and well made quality product.”
For more information about how Westbury manage supply chains and customer relationships for control panel manufacturing: