Weather can have a significant impact on manufacturing. For instance, a hurricane could prevent the shipment of certain materials that are necessary for production. No matter where manufacturers are located, they can be affected by this problem. Severe storms can knock out bridges that prevent materials being moved from Canada to the U.S. Railways can also be compromised in extreme heat by causing rails to buckle.
Mexico is no different and the country has recently been subjected to some odd weather patterns. On August 17, Mexico City was hit with a hailstorm that made some roads impassable, according to The Washington Post. Residents were treated to the astonishing sight of seeing their city covered in snow in the middle of August. In addition, Tropical Storm Cristobal is gathering in the Caribbean that could soon hit the Gulf of Mexico, an additional article from The Washington Post noted.
As more manufacturers are transitioning to "just in time" delivery, supply chains are somewhat more vulnerable to weather disruptions like these. Under this strategy, manufacturers typically reduce inventory, which allows them to save overhead, according to Business Forward. On the other hand, the lack of inventory can leave a weak spot should a natural disaster occur. In the analysis "Severe Weather and Manufacturing in America," the company cited the example of how 2011 flooding in Thailand affected more than 1,000 industry facilities, and consequently, consumer electronics manufacturing in the U.S. dropped by one-third.
Having a plan in place
Weather is a common problem that most manufacturers are accustomed to dealing with, which is why heavy storms in Mexico are not really a cause for alarm, although they could slow down manufacturing for a while. However, by employing certain best practices, plants can reduce the negative impact of inclement weather, which can be unavoidable.
According to Kinaxis, developing a supply chain risk management strategy can provide some solace in a time like this. Rather than relying on one supplier, manufacturers with a strategy in place will always have a backup if a natural disaster affects a plant in another country. Of course, this isn't quite as simple as it sounds, given the complexity of most supply chains. Manufacturers need to develop an understanding of the various tiers at work. In other words, they must have an awareness of their suppliers' suppliers to develop an adequate course of action.
In addition to crafting such a strategy, implementing inventory tracking is another step manufacturers can take to ensure the continued profitability of operations.
With the right measures in place, manufacturing in Mexico can be a strategic business plan.
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