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Raw Materials Shortfalls Create Strategic Challenges

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WaqasAltaf
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Supply Network Guru
Recycling
WaqasAltaf   5/26/2014 9:27:57 AM
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Recycling can be one way to utilize defected materials for further manufacturing and to avoid these circumstances to some extent but this is not the permanent solution. Companies need to improve their monitory policies to have a detailed look on their resources which are available or lacking and if needed arrange them before time.

TaimoorZ
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Supply Network Guru
Re: Water is in the air
TaimoorZ   5/23/2014 4:10:53 PM
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"Anyone not looking at raw materials issues is likely to be caught out when a shortage arrives. And those who act quickly and in advance (by changing direction or shifting purchases for example) can get ahead of the pack."

@Hailey: I think that's a very smart thing to do particularly when you're dealing with commodities where there supply can fluctuate a lot. An alert about a possible shortfall beforehand can allow the company to take measures so the impact is reduced considerably. I do agree that this can easily lead to a competitive advantage.

TaimoorZ
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Supply Network Guru
Re: depends on size
TaimoorZ   5/23/2014 1:30:22 PM
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"I imagine it is only the very large companies that need to actively manage the supply of natural resources.  Smaller companies could ensure they have multiple suppliers with different sources or, even better, different materials to offset shortages"

@Flyingscot: I think even if you're a large company with the muscle to stock beforehand or a small company with other options, the rationale of predicting the demand accurately is very much useful. With overstocking there's a high cost involved in the form of capital tied up and the inventory holding cost goes up greatly. With multiple suppliers, there's always an issue of ensuring consistency and that too isn't the best option. The more a company invests in accurate prediction of demand, the better the results will be.

Jacob
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Re: Water is in the air
Jacob   5/20/2014 10:58:07 PM
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"You do need to make the maximum out of what you have but should not rely on it 100% all the time. You do have to look for alternatives in case of an emergency "

Nimantha, for production industry there may not be any alternative natural resources, but supply channel can be different.

nimantha.d
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Supply Network Guru
Re: Water is in the air
nimantha.d   5/20/2014 4:43:29 AM
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@Jacob: Very true. You do need to make the maximum out of what you have but should not rely on it 100% all the time. You do have to look for alternatives in case of an emergency 

Jacob
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Supply Network Guru
Re: Water is in the air
Jacob   5/19/2014 11:32:42 PM
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"Anyone not looking at raw materials issues is likely to be caught out when a shortage arrives. And those who act quickly and in advance (by changing direction or shifting purchases for example) can get ahead of the pack."

Hailey, that a good strategy because availability of natural resources may not be same all the time. Some may be seasonal or sometime availability can be affected by natural calamities. So those who have a regular monitor on all such parameters can take advantage of it.

Jacob
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Supply Network Guru
Raw material monitoring and procurement
Jacob   5/19/2014 11:28:18 PM
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""Raw material analysis at the commodity level is required, and most midsized companies don't have the resources to do all this work and keep a pulse on natural resource constraints," Vikal said. "Analysis [and] early monitoring detection would help companies stay ahead of disasters.""

Jennifer, yes, availability and supply of raw materials matters with production industry. Big companies can monitor about future availability and if needed they can stock it too. But that's not the case with small and medium companies. They don't have such facility to monitor the market well in advance and resources to procure the materials well in advance.

Hailey Lynne McKeefry
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Blogger
Water is in the air
Hailey Lynne McKeefry   5/19/2014 8:48:00 PM
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I was talking to one independant distributor who told me that they monitor natural resource availability very closely--with an eye toward capturing strategic advantage. Anyone not looking at raw materials issues is likely to be caught out when a shortage arrives. And those who act quickly and in advance (by changing direction or shifting purchases for example) can get ahead of the pack.

FLYINGSCOT
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Supply Network Guru
depends on size
FLYINGSCOT   5/19/2014 11:20:38 AM
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I imagine it is only the very large companies that need to actively manage the supply of natural resources.  Smaller companies could ensure they have multiple suppliers with different sources or, even better, different materials to offset shortages.  By the way did you mean silicone or silicon for wafers?   I image it was a simple typo but maybe there is a big use for silicone that I am not aware of.



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