Vulnerabilities of global supply chains
Dave Broxton, managing director of Bohle, argues that coronavirus has highlighted fundamental weaknesses in the global supply chain.
The cost of coronavirus to the Chinese economy has been massive; its impact is global.
JCB announced last month that it was cutting working hours and suspending overtime because of a shortage of parts as its Chinese suppliers struggled to make good on orders.
With 25% of its suppliers remaining closed it’s a situation unlikely to turn around any time soon. And it’s not alone.
Coronavirus has upended the tech giants including Apple, which assembles numerous products including the iPhone in its Chinese factories. Many more companies rely on component supply.
And there are plenty of companies within our own industry who are no doubt twitching at the prospect of continued disruption.
Bohle isn’t entirely immune. As a global business, we do supply some products manufactured in south east Asia. Our stock holding is, however, high and while we will continue to monitor the situation closely, it gives us a level of insulation from the impact felt by some other suppliers into the glass industry.
Coronavirus has evidenced how interconnected we all are as part of a global economy. It’s a great driver of innovation. We couldn’t achieve many of the things that we have as an industry without global imports; but it also flags the risks. If a key supplier within the global economy goes down, so does the rest of it.
Bohle decided to take greater control of its own supply chain two years ago, with the decision to manufacture more of its own hardware here in Europe.
I’m not about to sit here smugly and say that we saw coronavirus coming. It’s pretty clear nobody did. But we did see an opportunity to bring more security to supply, through own-manufacture, something that has also allowed us to innovate and to drive up quality, because those are the things that our customers were demanding.
This is embodied in products like the Bohle-manufactured Santos shower door hinge. It’s able to accommodate door weights of up to 40kg, with a heavy-duty version available soon, designed to carry 60kg. Manufacturing our own products means we can respond to our customers who are demanding hardware to handle heavier glass.
It’s also embodies new design standards with a contemporary shape, tight shut lines, cover plates so no visible screws, infinitely adjustable zero position, and self closing from 15 degrees. The price point is far more accessible than other premium offers.
This strategy wasn’t driven by coronavirus or any perceived threat to our supply chain. It’s because we saw the market was broadly divided into two areas: very inexpensive hardware mainly sourced in Asia; or very expensive products sourced in Western European countries. And we saw a market opportunity.
Bohle has understood for some time that if you’re dependant on certain suppliers it also sets a limit on your ability to realise the potential of the markets that you’re in.
Our scale means that, on the one hand, we have high purchasing power, so we can buy at volume and at lower cost, something that directly benefits our customers.
On the other, this same scale and our specialism means that we can afford to invest in the development of our own glass hardware ranges with more control over the design and the quality of product and greater flexibility to align our offer to the market.
There will be a number of UK companies reviewing their supply chains over the coming months. Coronavirus does not represent the end of a model of global supply; things aren’t going to be rolled back. It does, however, expose certain weaknesses within it.
Bohle is part of that global economy but having already shifted our approach to manufacture more of our own product, while sourcing other products from third-party suppliers where it makes economic sense to do so, we are also protected from disruption to the global supply chain.