War Logic

Thousands of companies - suppliers of raw materials, products and components - have closed down. But also companies located in "safe" areas where there is no fighting are facing problems.  A large part of the labour force is under arms.  Despite the large numbers of refugees, many families have not left the country. Therefore, the current focus is on keeping the medical and food industries going.  Keeping transport infrastructure and basic services such as electricity and water in operation also requires a lot of effort. The war conditions, however, create many logistical challenges. According to the Association of Industrial Automation Companies of Ukraine, 90% of engineering companies, subcontractors and their distributors have ceased operations. So finding and getting spare parts for necessary repairs on site is not at all easy. 

We too are touched

Also our companies are facing the consequences of the Ukrainian war in combination with the recent disruptions in global supply chains and rising inflation. In addition to significant price increases, it now appears that the availability of technical spare parts and components is no longer evident. Manufacturers decide not to produce certain parts because it is no longer profitable or simply because of problems with suppliers of crucial parts. Spare parts that until recently were delivered in three days, now take three weeks, and may soon take up to three months. 

Better Safe than Sorry?

To save costs, many OEMs and spare parts manufacturers have switched in recent years to a just-in-time (JIT) or a just-in-sequence (JIS) production system.  More expensive parts with low demand are even produced only on demand. All this makes the current supply chain prone to problems.  However, the highly variable and uncertain delivery times of spare parts force us to switch from Just in Time to Just in Case. In order to be better prepared for these disruptions, we need to do two things: make a risk analysis by estimating the consequences of non-availability of spares, and then take the necessary risk mitigation measures.

Time for strategic action

As a result, it is high time to sit down with your MRO suppliers and make agreements about possible scenarios and security of supply.  It is high time to update your ERP or EAM system with more accurate minimum stock quantities, delivery times and order quantities. It is high time to get your spare parts warehouse and inventory in order. Production downtime is doubly painful when you are waiting for a spare part to be delivered, while the same or similar spare part is lying somewhere in your warehouse but remains untraceable. It is high time to start thinking about inventive solutions such as Pooled Inventory Management (PIM), Managed Dealer Inventory (MDI) and producing parts yourself using Additive Manufacturing. It is high time to network with colleagues from other companies. Because undoubtedly we can help each other out.

General John J. Pershing already said it in World War I: "Infantry wins battles, logistics wins wars." What about the spare parts logistics in your company?

Wim Vancauwenberghe

Maintenance Evangelist and Director of BEMAS

PS: If you want to help industrial companies in Ukraine, please visit https://matchmaking.appau.org.ua/clusters-4-ukraine/.