Metalworking Manufacturers Meeting Supply Chain Challenges


Metalworking manufacturers have been grappling with supply-chain disruptions and rising raw-materials prices over the last couple of years. China’s zero-COVID policy disrupted metal supply chains with frequent and sudden shutdowns of ports and factories once a single case of the virus was detected.

In addition, the Ukraine war and resulting sanctions and economic uncertainties have disrupted metal supply chains already impacted by the COVID pandemic. Russia, one of the world’s top producers of aluminum, steel, and nickel, was hit with sanctions which caused the prices of these metals to increase significantly. 

Mitigating Supply Chain Risks

Even in the wake of these challenges, the metalworking manufacturing business is going strong. How are firms mitigating metal supply chain issues? 

Because the United States remains one of the world’s leading steel and aluminum producers, manufacturers have begun to rethink their own supply chains, with local metal suppliers becoming a more significant player in the supply chain. Manufacturers are looking closer to home to secure a reliable source of materials to protect themselves from global supply chain disruptions.

Manufacturers are also digitizing their supply chains to track raw-material production by suppliers and customer usage in real-time. This data is used to bridge communication gaps and delays affecting the industry. Digitization, combined with advanced data analytics, robotics, and automation, can enable even small businesses to place more timely orders, address production flaws, and ensure on-time delivery of the supplies they require to keep operations running smoothly. Organizations that can help small businesses digitize their supply networks include the National Institute of Standards and Technology (NIST), which sponsors manufacturing extension partnership (MEP) centers across the United States; the Manufacturing Enterprise Solutions Association (MESA) International; and CESMII – The Smart Manufacturing Institute.

Other risk-mitigating measures for metalworkers include having strong partnerships at every level in the supply chain. Also, manufacturers should determine weak points and vulnerabilities throughout their supply chain. For example, a business could be sourcing from only one supplier, resulting in a significant failure if there is any disruption. A contingency plan should be put in place to account for this and bolster redundancy and resiliency. 

Manufacturers should also conduct regular audits to ensure that their security practices are still appropriate for the business and that all third-party vendors and partners are on the same page regarding contingency planning.

Ensure Clients Have the Right Manufacturing Insurance in Place

Seneca Insurance Companies specialize in providing monoline Property insurance for manufacturers, including metal shops. Our Property form includes replacement cost on the building, the value of machinery tools, office equipment, inventory, and finished goods; Business Interruption; and Equipment Breakdown. In addition, we can insure property of others in the insured’s care (molds & dies); goods in transit; business personal property temporarily at another business such as heat treaters, grinding shops, or plating operations; computer hardware and ERP software; and employee tools at an insured’s premises.

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