PRESIDENT’S MESSAGE
It’s the End of the Supply Chain as We Know It (and I Feel Fine)
NOT A DAY GOES BY when I do not read cataclysmic stories on how the supply chain is completely broken. From massive shipping delays to shortages of microchips, the supply chain up and down the line has been dramatically affected. I speak with members every day who tell me stories of unreliable shipping and long lead times on parts. There are simply parts that are just not available for the foreseeable future. I recently had a customer tell me that a radiator for a current model generator had a lead time of “unknown.” Not that it was not in production or obsolete or that it might take 12 weeks, but rather that they quite literally had no idea when it could be delivered. I had never heard a response like that from an OEM and I heard it twice in one week. Times are dire indeed.
Just in Time is Now Just in Case
I often used to argue with my father about why we carried so much inventory. I took a few business classes and learned that the most efficient way to manage inventory is with the “Just in Time” method, so I obviously thought I knew better than my old-school father. Essentially, this is the way that the automotive industry has worked. It is a well-coordinated dance
between raw material suppliers, shipping companies, parts and sub assembly factories, and the final assembly plant. It allows the most efficient use of capital and space, eliminating the need to tie up funds in unnecessary inventory and warehousing space. Throw in the fact that it is a global supply chain with all the complicated logistics that it entails, and it is truly impressive how it all works… until it does not. The events of the past eighteen months showed us how delicate it all is when various parts of the “Just in Time” manufacturing system start to fail. My father used to always tell me, “We are on an island and things happen. It’s always better to be prepared.” I lost that battle with him, and I am glad I did. It is what allowed us to be able to serve the island after Hurricane Maria in 2017 and the subsequent collapse of the electrical grid.
I believe many companies will be moving from a “Just in Time” to a “Just in Case” inventory model. Anybody that has tried to purchase a car, compressor, forklift, or any relatively complicated piece of machinery has encountered lack of inventory and long lead times. People in all levels of management have been shocked by the effect this has had on their business. I suspect this will be the trend
By Bobby Duran NARSA President / 2020–2022
bobby@cscradiator.com
for a few years until the supply chain recovers to its post-pandemic reliability. Then I have the suspicion that once the memory of the pain of the supply chain wanes, the desire to post stronger profits for the next quarter will bring back “Just in Time.”
I see the dysfunction in the supply chain as a tremendous opportunity for NARSA/ IDEA members. NARSA/IDEA members tend to be incredible problem solvers. I am constantly amazed at the solutions our members come up with that are unique to their markets and customer base. I have always loved visiting radiator shops in whatever part of the world I happen to be travelling in. Some of the most ingenious ideas and repair methods I have seen come from areas of the world that do not have parts readily available for fast delivery. These shops tend to be forced by circumstance to come up with innovative ways to keep their customers’ equipment running. Let’s just say there are not many Pep Boys stores in rural Cambodia. While some of the methods I witness are quite
2 | THE COOLING JOURNAL | July/August 2021
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