The Fragility of the Supply ChainJune 15th, 2021 by Luly Hernandez
In one of the last presentations for the Window & Door Manufacturers Association (WDMA) virtual conference, Brent Neal, regional technical manager at AkzoNobel Wood Coatings, discussed recent disruptions in chemical markets and their impact on the fragile supply chain for coatings and resins.
As in any industry, if one area of production is disrupted, it can affect entire businesses. Neal explained how businesses need to prepare and develop strategies in order to mitigate for a change in plans, especially since weather events are expected to become stronger and more frequent, which can pose adverse effects, as recent events have shown.
An example he mentioned during the discussion was February’s unexpected and severe winter storm in Texas. He compared the effects similar to that of several delays and cancellations occurring in a busy airport, like the international airport in Atlanta. Delays and disruptions to the schedules can alter plans for many people which can slow down businesses.
“One disruption… can create delays much further down the network and create a lot more damage to the economy. And I want to compare this to what we saw in the February winter storm in Texas,” Neal said.
After trying to recover from the COVID-related shutdowns, chemical refinery plants in Texas had to shut down due to the devastating winter storm. Normally, shutting down is a scheduled process – plants do so every 12-18 months for maintenance. “Bringing them back online is generally a one- to two-week process,” he said. During the storm, the plants shut down suddenly without the ability to follow proper procedure and pipes had suffered cracks and damage as a result of the freezing temperatures.
Neal explained the current status of the coating supply chain. When concerning solvents, current supplies are not sufficient to satisfy back-orders. Resins are facing similar circumstances as many suppliers are having raw material issues and orders are delayed.
Neal then delved into addressing strategies that can be in place to help prevent these disruptions. One is to adopt risk-oriented buying policies, in which one categorizes suppliers and raw materials to visualize risks. Another strategy is to maintain flexibility. He mentioned an example of a company with three plants that had to find new positions for employees after one of the plants suffered damages from a fire. Some employees were relocated in days. The plant was rebuilt and was able to resume production six months after the fire. This type of flexibility allows a company to produce from multiple sites and keep talent despite disruption.
The WDMA’s virtual conference concluded on June 10.