Temporary supply shortages are making economic headlines as drivers of inflation and order backlogs.
Temporary supply shortages are making economic headlines as drivers of inflation and order backlogs. Kormac addressed the same uneven supply availability during the last recovery. One of our clients, a global Oil & Gas heavy equipment manufacturer, lost critical suppliers when the 2008 economic crisis drove many small machine shops out of business. The resulting vacuum in its supply chain reduced OTIF to less than 60% and created a backlog of customer orders in excess of $125 MM.
When the economy rebounded, they sought our help to evaluate order backlogs, identify and engage capable new suppliers, and develop supplier training and quality control processes. By the project’s conclusion, we had reduced the client’s order backlog by more than $90 MM and increased OTIF from <60% to 85%.
For more details on how we helped this client cultivate supplier availability, view the case study below.