Rethink procurement strategies

It’s a similar situation for packaging equipment as well. Formost Fuji has focused on parts procurement as early in the process as possible.

“We make sure our engineering is done earlier so we can order electrical components in time to get them here and meet the deadline,” said Dennis Gunnell, Formost Fuji president. “If we ordered them three to four weeks out from we need them, we’d be behind. We have to get everything in the process sooner.”

Timelines have become a critical issue as many bakeries implement penalty fees for late projects.

“We’re scrambling to get the components here on time,” Gunnell said. “We have to stay in front of it and make sure we don’t let it slow us down.”

These days, collaboration has taken on a whole new meaning, whether it’s brainstorming new ideas for sourcing materials, working with different vendors or tapping into resources from partner companies.

“Manufacturers are looking at new, collaborative and innovative ways of working with different partners than they’ve ever worked with before to find ways to successfully navigate the microchip shortage and to better serve their customers,” Anderson said.

Tap into new resources

The economy is in good shape, but that means consumer demand has created bakery equipment needs that many suppliers can’t meet on their own … especially when the chip shortages spur hoarding. This is essentially putting all manufacturers in competition, whether it’s bakery equipment, automobiles or water heaters.

“My clients are proactively managing it by talking with their customers and suppliers to get a better picture of what’s really needed so they can better allocate what they have,” Anderson said. “They’re collaborating and partnering with other companies. If they can spread the workload across the supply chain in a smarter way, they can be more successful together.”

Access to additional resources isn’t always easy, especially for smaller supplier companies, but some are able to reach outside their own structures to find local distributors or other resources to tap some help when the larger conglomerates may be scooping up what few components become available.

“Some of the smaller equipment manufacturers are finding regional resources — not sister companies — but ones they’ve partnered with before,” said Kerwin Brown, BEMA president and CEO. “There might be a few units to share; I think there’s been some sharing outside individual corporate structure whenever it’s possible.”

Engage with customers and partners

With labor shortages at all-time highs, automation is more important than ever in every stage of the supply chain.

“Many of our members have said it’s a banner year,” Brown said. “That means ROI is changing. Bakeries are saying they have to automate … the ROI completely changes when they just can’t get labor.”

Increasing engagement across the supply chain is a great survival strategy in the near term, but it’s also a lesson that should be carried into the future. For example, many equipment manufacturers may find themselves rethinking stock agreements with their suppliers.

“Right before all of this, many of our customers had gone super lean and wanted to source motors, encoders and sensors directly,” Miller said. “In turn, we dropped our levels, and that created a situation where no one had much volume when the disruption started. I think that will shift as we come out of this.”

Moye noted that his company worked with a controls supplier to host that inventory through the RBS internal stock to use as needed.

“But when the disruption started, they had to start pulling from that inventory as well,” Moye said. “Having that access to inventory will continue to be a great asset in the future.”

To navigate these shortages and meet demand, bakers must stay wholly engaged with their suppliers to ensure project efficiency and a speedy ROI.

“We need to inform customers what’s going on as quickly as possible, so they know lead times are extended and they can prepare,” Tamborello said. “Our sales group will get in touch with customers who might have an order imminent and let them know what’s going on. Sometimes you can get started on a project sooner if the customer was holding off because they had an assumed lead time in their head.”

But the scramble coming from baking companies and their suppliers being busier than ever isn’t all bad.

“The high capacity, the banner year — and all the problems that come with it — are ultimately good things,” Miller said. “In other industries, they may not be having the kind of year we are, and that’s where the struggle could be much worse.”

Thinking outside the box and working together will be key to getting through the next 12 months.

“Expanding the ability to get components like chips will require companies to think innovatively and be willing to partner and even invest,” Anderson said.