The procurement and supply chain team at engineering giant Cummins “worked around the clock” to resolve the challenges thrown up by the pandemic and disruptions.
The company’s 2021 Sustainability Progress Report said purchasing teams were able to cut a list of “highly-constrained parts” in half, while private vessels were chartered to bypass clogged ports.
“The complex combination of pandemic-related effects, weather events, fluctuating demand, and disruptions in global parts supplies and transportation impacted most companies, including Cummins,” said the report.
“The company’s supply chain organisation worked around the clock to resolve these challenges.”
Cummins said the supply chain team totalled more than 30,000 people operating across more than 125 plants and 40 warehouses globally, managing more than 25,000 suppliers.
“The company’s purchasing teams worked to manage supply shortages and ensure supplier continuity, especially relating to electronic chip recovery, to ensure Cummins was able to produce and deliver to its customers – particularly after a robust increase in demand in mid-to-late 2020,” said the report.
“Throughout 2020 and 2021, these teams were able to reduce the company’s list of highly constrained parts by more than half, creating a more dependable supply network.”
Cummins said this work meant by the end of 2021 there were “record shipments” from warehouses and customer aftermarket back orders were cut by 30% – “a major shift compared to the industry as a whole since the start of the pandemic”.
Teams are now:
• Establishing regular “plant efficiency reviews” to “identify opportunities to reduce costs where possible”;
• Implementing a new risk assessment process; and
• Driving a “robust supply recovery process to recover remaining constrained parts and identifying opportunities to reduce logistics and transportation disruptions”.
“The past two years have been an important reminder that today’s supply chain is changing more rapidly and facing more challenges than at any time in the recent past,” said the report.
“And people have learned the critical role supply chains play in their daily lives. Cummins has long been grateful for those working in these critical roles at the company, but especially now.”
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