Friday, December 9, 2022

Alcorn McBride: Is “just-in-time” out of time?

by Scott Harkless

If you move to Florida, you quickly realize that an interesting phenomenon occurs every time a hurricane is projected to make landfall. Stores almost immediately sell out of bottled water, toilet paper, plywood, batteries, canned food, and “hurricane supplies” (Floridian for booze and Pop-Tarts). People will also line up their cars at the gas stations until every pump in the entire state runs dry.

Experiencing this is a sobering reminder of what happens when human psychology and supply chain collide. It makes it obvious that we live in a world of “just-in-time” manufacturing and fulfillment. Behind the scenes of these stores, managers and computer systems are keeping track of trends and planning accordingly for how much product is needed and when. This is sensible. If you know you typically go through 10 packs of TP a week, you schedule delivery of 10 packs of TP a week to backfill your stock. If you go above or below the typical trend, you compensate with your next scheduled delivery. This keeps the item on your shelves fresh and minimizes the need for warehouse space to store excess product.

Where this whole concept comes crashing down is when Jim Cantore from The Weather Channel shows up and starts explaining to viewers the many ways in which the impending storm will devastate humankind in your community. That’s usually the moment when you and your neighbors suddenly decide that you don’t have enough TP to survive the apocalypse. The resulting surge in demand throws the sensible, typical trend out the window: Shelves go bare, lean-running warehouses are quickly depleted, the manufacturer is caught off-guard, and your next TP purchase is now on back order!

Within our industry, a very similar situation has been playing out on a much larger scale, revealing vulnerabilities in the global supply chain. It has become very difficult to predict which items you’ll have trouble getting your hands on when you need them. This can be terribly inconvenient when it comes to building complex attractions that rely on large amounts of unique supplies, so what can we do to adapt to this situation and get ahead of the game?

For Alcorn McBride, the supply chain issue that has impacted our business the most has been the global chip shortage. For various reasons, there is an enormous backlog in the production of semiconductors with currently no major relief in sight. Many parts that used to be readily available at a moment’s notice are commonly being sold with lead times of 52 weeks or more. That’s a tough pill to swallow for anyone that depends on electronics for their core business!

The good news is that we’ve been playing the semiconductor game for a long time, and we had already established a habit of keeping a healthy “safety stock” of critical components. It’s costly to buy large quantities of parts like this, but this investment strategy is one of the ways we’re able to consistently build our products for many years without having to suddenly discontinue them. If a key component in one of our products abruptly becomes unavailable, we simply tap into our safety stock. This allows us to continue building that product for at least a few more years and buys us plenty of time to design a suitable replacement. Although we didn’t see the global chip shortage coming, this strategy has certainly helped us to endure it well.

Where we’ve felt the most severe impact of supply chain challenges is the availability of common components that had historically been very easy to get. This is the kind of component where if one version of the part becomes unavailable, it’s usually OK because there are scores of other, cross-compatible parts made by several other manufacturers. When parts like that started to become scarcer, it forced us to adapt to the situation and tweak our approach. Fortunately for us, we already had a system in place to deal with this sort of thing. We just had to expand its reach to encompass a lot more parts, and to invest in orders for those parts much earlier in the production process.

I believe that this approach is becoming an inevitable reality for all of us, no matter what kind of supplies we depend on. We’re in a stage where it is no longer realistic to expect everything we need to be ready at a moment’s notice. To keep our projects moving, we really have no choice but to get better at playing the long game and thinking about what supplies we need long before we need them. We must be willing to invest in products, parts, and raw materials long before they are used in the construction of an attraction. We also must account for this shift in ordering materials as we plan the installation process. Bottom line: if lead times on supplies are a year out, then we need to be thinking, planning, and stocking materials at least a year (if not two) in advance or we are asking for trouble!

This shortage challenged Alcorn McBride to become even more nimble. If we can’t build a product because we can’t get a part, we don’t consider it an option to just throw up our hands and say, “Oh well! Guess we can’t ship you one for another year or so. Good luck!” Knowing that partners and clients are depending on us provides all the motivation we need to find creative solutions. Perhaps that means adjusting the design to accommodate a different part, being tenacious about finding a new source, or finding other creative ways to adapt our designs to what is available.

After all, the ability to be flexible and nimble is one of the biggest strengths a niche company can bring to the table. Challenging circumstances give niche companies the opportunity to really demonstrate their value to this industry.

Every business is different, so the details of your company’s adventure will vary from ours. In general, though, I think it’s safe to say that most organizations have little choice but to shift away from the “just-in-time” model as much as possible. That means thinking and planning creatively. Perhaps you have favorite products or materials that you prefer to use. It’s a healthy exercise to consider how you would adapt if those things were suddenly unavailable. Keeping our industry moving forward will depend on that kind of resourcefulness.

Now if you don’t mind, Jim Cantore just popped up on my TV and apparently a storm is approaching! No doubt the TP shelves are completely empty at this point but, if I leave now, I might be able to snag some hurricane supplies! Until next time, cheers! • • •

Scott Harkless
Scott Harkless
As Chief Innovation Officer at Alcorn McBride, Scott Harkless works closely with clients to determine their biggest areas of need and leads a talented team of problem solvers to create the products used in many of the world’s most popular attractions. He draws upon his experience in product development, system commissioning, client training, marketing, and sales to ensure that the products stamped with the Alcorn McBride logo exceed client expectations and offer value to the entire industry.

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