Disruption of B2B Supply Chains by a Global Pandemic Highlights the Importance of Qualified Secondary Suppliers and Quality Assurance TestingPost by: RJ Lee Group News
- 3:59PM Dec 03, 2020
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Lysol wipes, toilet paper, steak, coins, furniture and appliances. Before 2020, this would be confused with a particularly strange shopping list. But we are now aware that these products are among the many items that can be hard to find during the pandemic. These shortages are a reminder of how interconnected and complex global supply chains are. When countries shut down this year, it reminded all of us how commerce is more prone to disruption than we’d like to admit. It’s not just the manufacturers or industrial processing plants who build items; supply chain issues affect service-related companies as well. It can be challenging to find new sources for materials, procure them, find equivalence in quality, and reliably certify those suppliers. Supporting customers in their efforts to maintain product quality is one of the many reasons laboratories like RJ Lee Group were considered “essential” businesses and allowed to remain open during government-imposed shutdowns.
CEOs and VPs of Operations are probably more worried about global supply chains now than ever before. The truth is that sourcing and procurement of materials has always been a critical issue, but now it has a much higher public profile. At the earliest stages of the pandemic, industries like agriculture and pharmaceuticals were seen to have sensitive supply chains that rely on efficient transportation networks for perishable items. These industries also were exposed as having too much dependence on foreign supplies with a lack of substitution alternatives. Manufacturing companies were also exposed as having long and complex supply chains involving multiple vendors, which makes it sensitive to production disruption if companies do not have a plan in place. The time to develop a supply chain risk mitigation plan is now and will need continuous development.
The potential for quality differences in supplied materials, components, or products is the primary risk to corporate leaders. A supplier’s lack of a shared commitment to quality, environmental, safety, and social responsibility standards can be detrimental to your company’s relationships with customers. Legal language in purchase documents can articulate requirements for many of these items, but test certification is the “coin of the realm” for critical quality issues. Partnerships with suppliers can include teaching the quality-control methodology you expect, but that may not be possible when suppliers are scarce, and demand is high; thus, quality assurance and control become even more essential.
My company, an industrial laboratory in Pittsburgh, PA, is not just a testing service provider – we have our supply chains for lab supplies and personal protective equipment (PPE) that stressed to the point of breaking in 2020. Demand for virus protective masks spiked higher than ever; we had to procure from unfamiliar vendors to obtain materials and found a large quality and functional variation from supplier to supplier, sometimes even from the same supplier.
Every company claims a commitment to “Quality,” but there is a significant risk in assuming quality is equivalent across processing companies. It isn’t enough to accept a vendor company’s assurances; manufacturers have long understood the need to perform qualification testing for new vendors of materials or components. The challenge for operations leadership is to find the right combination of testing and frequency to provide statistically relevant information; this testing needs to be at the time of qualification and ongoing periodic testing during normal business processes. Testing every material purchased is more than likely impractical or impossible. Still, there are many qualified Quality Assurance professionals available – and one of them may already be on your staff – to help make those decisions.
The international marketplace presents its own challenges for companies aside from logistics. Most people are familiar with news reports of materials deficiencies in imported products from a variety of countries. Some cases may be associated with poor quality. In other cases, the sourced material may fit intended use in its home country but be incompatible with U.S. requirements. U.S. companies looking to export, or support international manufacturing operations, must demonstrate compliance with the target market. Despite many common certification standards promulgated by ISO and ASTM, many countries or regions have specific requirements that aren’t identical to test methods in the U.S.
Finding a testing source to demonstrate equivalence with country-specific standards can be a challenge as many commercial laboratories would view these as outside of their normal course of business. In our experience, a reliable third-party lab partner that is reputable, responsive, and knowledgeable can be the difference in having the highest confidence in product performance and safety. It also helps to mitigate some supply-side risk and alleviate future bottleneck issues.
Managing supply chain risk has always been a critical business function, regardless of industry sector or company size. The COVID pandemic has simply highlighted the impact, not only to businesses but also to consumers’ daily lives across the globe. Broadening trusted networks has never been more important, and testing verification is an essential part of the equation.