Navigating Supply Chain in a Post COVID World
Supply chains around the world have been jeopardized by global issues such as raw material shortages, trade wars, and economic uncertainty for many years. On top of these issues, the COVID-19 pandemic has further challenged the resilience and flexibility of supply chains in an unprecedented way. Needless to say, it is time for us to share our experiences to provide greater visibility into our supply chain in order to drive improvements wherever necessary.
An Introduction to Koch Modular’s Supply Chain
At Koch Modular, we take pride in our supply chain management and would like to provide some insight into who we work with and why. We believe that by addressing these points and increasing transparency, we can better connect and build trust with our clients and suppliers.
Our supply chain is made up of 100+ suppliers that provide us with the following core four: pressure vessels, heat exchangers, structural steel, and modular assembly shops. We work with dozens of commodity-based (i.e. manual valves, pressure transmitters, regulatory switches, etc.) suppliers as well. The process of becoming an approved supplier is meticulous, consisting of technical and quality audits by a QA team, financial discussions led by Koch Modular financial officers to ensure the financial stability of vendors, as well as bids on real-time projects. We ensure that all suppliers follow professional industry quality management standards, and local laws and ordinances. With shared standards for labor practices and long-term objectives, the maximization of quality, consistency, and safety of our supply chain is achieved
Koch Modular Actively Engages with Local Suppliers
The majority of our suppliers are domestic and are located across various regions of the United States. Since the supply chain is interconnected, a disruptive event in one link can have damaging effects on others if it isn’t controlled properly. As such, we maintain good relationships and open lines of communication with our suppliers, further enabled by quarterly update meetings that allow us to foresee and plan against and along with possible disruptions. Oftentimes, our suppliers are pleasantly surprised by our transparency during these meetings and wish that more companies would have these conversations with them.
Benefits of Domestic Sourcing
Domestic sourcing has many benefits and is partly why our supply chain has remained relatively unscathed throughout the challenges of the past year. For one, keeping things local allows us to give back to the domestic economy and community. Additionally, we can easily get in touch with suppliers and avoid oversight problems that come with international sourcing. Due to our rigorous management, we are able to efficiently identify, evaluate, and resolve any issues threatening our supply chain operations. Not to mention, working with domestic suppliers results in faster delivery times, increased cost-effectiveness due to optimized logistics costs, and lower environmental impact in view of reduced carbon emissions and energy consumption.
Domestic sourcing affords us modular assembly benefits as well, allowing us to fulfill our promise of single-source responsibility. Modular freight is carefully evaluated as these expenses, if not managed correctly, can be a critical portion of the total cost of ownership to our client; we mitigate these costs as much as we can by conducting freight studies and sourcing materials local to project sites whenever possible. For example, that can sometimes mean that we opt to ship modules via maritime transport if the project site has water access versus by truck. Keep in mind that truckable modules being shipped on roads need to abide by maximum dimension and weight restrictions unique to each state. Evidently, route optimization requires extensive knowledge of many factors, including local and federal DOT restrictions, ongoing and planned road construction projects, and inclement weather forecasts. We navigate these challenges by addressing these factors earlier in the project timeline and maintaining close relations with freight companies.
Why Does Koch Modular Maintain Supply Chain Transparency?
We recognize that our projects are part of a complex value chain and effectively addressing systemic issues requires dialogue and collaboration with suppliers and clients. The supply chain, and the challenges that come with managing it, are constantly evolving. Being able to work with these challenges is what we do best. Therefore, by providing greater visibility into our supply chain and increasing transparency, we encourage others to share their experiences with supply chain and generate discussion on how we can drive improvements that benefit our clients and suppliers.