Outsmarting the Supply Chain
Take an extra-nimble industry like food and beverage, throw it a curveball of pandemic proportions and watch as the clever solutions spill out.
By Shaila Wunderlich
Walmart’s workforce received word of a pending public-health crisis the same way most companies did: via internal memos distributed through the winter of 2019–2020. Like other companies of comparable size, the international retail store had an existing pandemic plan in place, a response to the SARS outbreak of 2003. Many more companies did not — a fact that became evident by fall of 2020, when supply and equipment stocks dwindled seemingly overnight. “Over a two-to-four-week period, we went from same-day shipping on replacement equipment to a wait time of 28 weeks,” said Taz Sutherland, Senior Manager II, Vendor Management and Operations at Walmart.
From labor shortages to sky-high cost spikes to shortfalls in equipment and materials, COVID-19’s relentless curve balls struck facilities’ food and beverage sector especially hard. “The world can be falling to pieces, but at the end of the day, people still want their fried chicken and potato wedges,” Sutherland said.
Fortunately, the food and beverage industry is also used to thinking on its feet. The solutions and strategies born from its brain trust over the past two-and-a-half years will endure as permanent, best-practice response to supply chain crashes of the future.
ConnexFM’s June 2022 Town Hall event, “Who’s Hangry to Reduce Maintenance Calls?” explored many of those solutions, and Connexus circles back with its Food & Beverage Council panelists for a deeper dive.
Canvass Alternate Supply Sources
Manufacturer/OEM. Designed to custom-fit specific machinery, OEM (original equipment manufacturer) parts remain the gold standard for repairing food and beverage equipment. As cracks in the supply chain stifled OEM stock, some FMs circumvented their contracted suppliers to procure directly from partner manufacturers. “We’re always transparent about it with our suppliers,” Sutherland said. “We say, ‘Look, this isn’t something we intend to make a habit out of, but right now we need to get this equipment up and running.’”
Off-brand/Aftermarket. When manufacturers themselves were short on OEMs (or when a service contract prohibited manufacturer purchases), FMs sometimes turned to off-brand or aftermarket alternatives.” Smaller, universal parts are especially ripe for this type of swap-out. “Fuses, contractors, gaskets, some motors, belts — those might be exceptions where you can go with generic,” said Hara Prager, Associate Director at Brinco Mechanical Management Services. A trend toward higher-quality product has rendered this option increasingly viable in recent years. “If I buy an aftermarket motor for a seven-year-old piece of equipment at half the price of OEM, and I get four-and-a-half extra years out of it instead of five, that’s a good deal,” Sutherland said. “Chances are I’d be swapping out for a new machine at 10 years anyway.”
Competitors. “Again, this is something we consider a last resort,” Sutherland said. “But when your supplier who is contracted to maintain six units of safety stock for you suddenly has none — meanwhile their competitor has three units available — our hand is kind of forced.”
Harvest From In-house
Sutherland’s team calls it “refurbishing” or “hot-swapping.” Other companies call it “harvesting” or “raise and rebuild.” All refer to the retention, storage and recycling of existing specialized machinery parts for re-use in other equipment. Aside from its obvious efficiencies in time, money and environmental impact, the recycling strategy pairs powerfully well with food and beverage facilities, where equipment condition ranges from used and abused to practically untouched. “I see so many double-stacked ovens where only the top oven was used, simply because someone didn’t want to bend over,” Sutherland said. “So the top might be shot, but the bottom is chock full of parts that are, at worst, dusty.”
Preventative and Proactive
Having squelched the supply chain’s most urgent, immediate fires, FMs next focused their efforts on big-picture adjustments. Amid 90% of June’s Town Hall respondents reporting continuing supply chain issues in their food and beverage facilities, it’s these preventative, proactive, systematic strategies that hold the greatest value moving forward. “We’ve not recovered yet,” Sutherland said. “And even when we do, it’s not like things are going to revert back to 2015.”
Supply chain issues are only issues when a facility needs supplies. “Preventative maintenance is more important than ever to increase the life of equipment,” said Stephanie Leslie, National Account Executive, Phoenix Energy Technologies. “Whereas break-fix worked just fine in the past, we no longer have that luxury when we’re dealing with wait times of nine to 11 months.”
Train employees. Operator error is the second-leading cause of equipment malfunction, according to Plant Engineering’s 2019 “Facilities Maintenance Study.” Operator error’s ultimate antidote? Rock-solid standard operating procedures (SOPs) and SOP training. “Properly training employees on how to operate, assess and shut down machinery is one of the most effective things you can do,” Leslie said. And that goes way beyond handing off a three-ring binder of instructions, Sutherland said. “Have you ever stopped to ask your employees, ‘Are you able to follow this? Is there anything we can be doing to simplify this or make it easier to understand?’ Good FMs pay attention to these things and are ready to adjust when they notice disconnects.”
Utilize technology. Every day sees new technology designed to tighten timeframes and margins of error around facilities fleet. That includes automated controls systems, QR codes that link to digital checklists and artificial-intelligence-driven equipment monitoring. “This tech can assist with budgets by forecasting equipment needs, avoid service calls by fixing problems remotely and arm technicians with data in advance of service calls,” Leslie said.
Empower servicers and technicians. Technicians and maintenance crews must be armed with the resources and support required to handle repairs on their own. “When you have the same four or five people seeing the same equipment each visit, there’s a real opportunity for taking ownership there,” Prager said. “You want the technicians feeling like this is their store, their equipment.” Walmart is in the process of expanding its internal tech team toward an overall goal of fielding at least 80% of the company’s work orders in-house. “We’re adding more specialty technicians to our existing team of generalists,” said Sutherland. “That’s extremely helpful in food and beverage, where you’re dealing with chip boards, complicated wiring, etc.”
Bolstering relationships with third-party suppliers and service providers opens the door to discounts, priority shipping and beefed-up safety stock. “We’ve been recommending our clients set up national accounts with equipment manufacturers, allowing manufacturers to forecast the clients’ needs and permitting the clients’ service providers to handle the install process,” Prager said. “In addition to potentially decreasing lead time, we see a substantial cost savings as well.”
With supply chain woes showing no signs of stopping, the food and beverage facilities space must heed these strategies and continue to come up with more. “This is unfortunately the reality of the industry right now,” Prager said. “If we’re proactive, building these strong partnerships, our facilities teams will come out stronger and more able to get ahead of emergencies.”