Many of us hoped that once the lockdowns of 2020 ended business would return to normal. But the economic balance of the world has shifted. Even as we reach the fourth quarter of 2022 we are still facing a shortage of component parts as well as skilled labor. However, we don’t know whether this economic shift is permanent, or just that supply chains are still broken.
At Veethree we have worked to overcome the challenges we are facing and have been able to fill a record number of orders this year – with increases amounting to a tripling of orders.
We have overcome a number of challenges to meet them, and while they haven’t been easy, meeting our customer expectations and growing the business are our main drivers.
With increased orders, obviously line production has needed to be increased which has been challenging due to local labor shortages. However, through thinking outside the box, we have focused on increased productivity and automation as a means of addressing this.
A focus on automation led to the investment in two new Apollo Seiko robots to perform soldering of circuit board components for the CANbus display and analog gauge product lines.
In addition to addressing the issues of a lack of skilled labor, this has also ensured better and more consistent quality solder joints for the electrical connections. The robots also run for six days a week for between 10 and 12 hours a day ensuring production is consistent.
The other main area of focus is on productivity and efficiency improvements. Efficiency is maximized by ensuring we have better fixturing, and faster machines with the introduction of automated machinery such as the Inovaxe SMART Storage Automation System which has meant our SMT lines can make 49,000 placements per hour. The Inovaxe has also improved efficiency and reduced the set up at the SMT line during changeovers and helps with reducing errors. This system is 60% space saving which helps in adding a third SMT line.
We have also needed to invest in the practical elements of building more manufacturing cells to meet demand and ensuring they are running efficiently.
In addition to focusing on technology improvements and automation we have also invested in the staff we have as well as ensuring they are utilized according to their skills and where they would be most beneficial.
This has meant using part-time employees in strategic areas where demand fluctuations are occurring to ensure these demands are met when needed.
We have also started using temporary agencies in order to ensure that we have the staff when and where we need them most in addition to increasing the staffing levels from 87-88 at the end of 2021 to 93-94 at the end of July 2022.
In the past year we have boosted our direct labor by approximately 25-30% and are still hiring to ensure we are able to meet customer demand. But the increase in the labor force hasn’t only been in the manufacturing side of the business but has also included indirect labor staff such as electrical technicians, electrical engineers and advanced manufacturing technicians. This allows the manufacturing team to get the support they need, quickly and efficiently ensuring the production lines are always functioning as they should be.
Material shortages is another international challenge at the moment, which is causing problems for many industries as lead times on products are substantially longer or not available at all. As our orders have tripled this year, it has been essential to find a workaround for these shortages in order to meet our clients’ expectations.
Overcoming these challenges has taken a shift in attitude about the way we would normally do things. While there is nothing we can do, per se, about the shortages themselves how we manage this is tantamount to our success.
The main thing we have had to do is work with multiple and different suppliers in order to get the orders when we need them. In critical component situations we have had to move to dual suppliers to increase the likelihood of receiving what is required. In regard to electronics and hardware challenges we have set up a system with our supplier base on consignment programs which send signals regarding inventory in real time. This has increased the speed of turnaround for equipment needed.
Once we have identified suppliers with the material we need, ensuring we have the right logistics in place to get the material from the supplier to our plant is another challenge that has had to be addressed. With driver shortages within the logistics industry, we have had to utilize multiple logistic avenues in order to reduce or eliminate delays to our supply chain.
However, these adjustments don’t alter the fact there are much longer lead times on most items so to counter this we have boosted our inventory levels from about $4.6 million to more than $7.0 million to ensure we always have the parts required to complete our clients’ orders.
To manage inventory control, we run daily material planning meetings to review material needs based on incoming customer orders and to ensure we have the necessary components to complete them. In order to keep all our staff up to date through the entire process we have increased our utilization of Kanban programs which are inventory control systems used in just-in-time (JIT) manufacturing ensuring we always know what we have available and what we need.
Many of our customers are aware of the global issues which Veethree are facing and therefore there is extra customer pressure which stems from their concern about deliverables.
Our customers are important to us and we therefore ensure that the customer is always kept in the loop. We hold regular conference calls with them in order to align realistic build schedules, as well as updating them on any delays we may face or changes that need to be made.
Here at Veethree we have two main client bases, the Original Equipment Manufacturer (OEM) and the aftermarket client. Both are equally important and we are doing everything in our power to ensure all builds and parts are available when they are needed for all customers. We carefully allocate our stocks ensuring they reach our customers who would be line down without it, rather than keeping it as inventory.
It has not been a straightforward journey to overcome these challenges, but through innovation, investment and keeping our end goals in mind we have managed to continue to grow despite everything and hope to continue to do so in the coming months and years.