Guest column

Houston expert: Here are 3 tips for a resilient supply chain during the coronavirus outbreak

Coronavirus likely will affect your supply chain — here's what to keep in mind. Getty Images

Consumers rarely consider the intricacies of managing a cohesive supply chain when the process needed to deliver product to market is free of disruptors. In short, engineering and design work is completed, a bill of materials is established, material is sourced, and product is manufactured.

Manufacturers often expect to easily purchase product off the shelves or online. When external factors come into play that have the potential to disrupt supply chains and the quick availability of product, proper management is even more critical for businesses and their customers.

During my 23 years at Smith, the world's largest open-market distributor of electronic components, I've witnessed various market disruptions and shifting supply chain dynamics. I can confidently say that the coronavirus outbreak is heavily uncharted territory for the technology industry. Mitigating supply chain disruptions during troubling times, however, is familiar to us. Even through uncertainty, I want companies to know that there are many options to keep their supply chains active.

Here are my top three tips for properly managing your supply chain during the coronavirus outbreak:

Assess inventory levels and run outages scenarios

It is important to not only assess your on-hand inventory levels but to quickly gauge the impact and availability of product from key suppliers. As a precaution and to prevent further spread of the virus, many electronic component manufacturing plants in China were shut down for weeks, and some are still running at limited capacity with prominent labor shortages.

Finding out which manufacturers have been shut down or are affected by the virus will help determine lead times and availability requirements. Surveying suppliers is an efficient way to gauge manufacturers' levels of impact and determine your own needs. Bear in mind what possible logistics delays you may encounter when assessing your material levels.

Build contingency plans with alternative sources.

With supply constraints from traditional sources being almost an inevitability, having flexible sourcing options and relationships with key suppliers is a prime strategy for contingency planning.

On top of that, make sure your sourcing partner has put stringent quality procedures in place and is certified to the highest industry standards. Expanding your AVL (approved vendor list) and qualifying other manufacturers will help keep lines running according to forecast.

Ensuring heightened supplier screenings with end-to-end evaluation transparency is even more essential during times of disruption. Trusted, multichannel sourcing capabilities are prime options in the face of the consistently evolving global situation.

Stay vigilant, and work closely with your emergency response team.

Uncertainty will continue to play a major role throughout the outbreak situation. From my experience, staying up to date with the latest news and maintaining frequent communication with both internal and external parties is one of the most proactive approaches to disruptive situations.

Smith's shipping and logistics hubs have mirrored capabilities and are located in Houston, Hong Kong, and Amsterdam, so we have been able to keep our operations running throughout the outbreak. Although Smith's business operations have continued without any shutdowns, the electronics supply chain has been significantly impacted, and disruptions will be felt for some time. The effects of the coronavirus are expected to trickle down to end consumers, as new product introductions for some consumer electronics have been delayed. Reports are even indicating that the supply and availability of technology products during the peak holiday season may be disrupted.

With the millions of components that go into everything from consumer electronics to oil and gas and medical equipment, our industry could see notable shortages in supply throughout the year. I encourage all companies and especially our friends here in Houston to thoroughly evaluate their supply chains. Utilizing these tips to implement a resilient supply chain will help build a strategic business outlook.

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Todd Burke is president at Houston-based Smith and Associates.

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Building Houston

 
 

VR training startup, HTX Labs, has raised funding from an outside investor for the first time. Courtesy of HTX Labs

HTX Labs, a Houston-based company that designs extended reality training for military and business purposes, announced last week that it has raised its first outside capital.

The company has received a $3.2 million investment from Cypress Growth Capital. Founded in 2017, HTX Labs — developer of the EMPACT Immersive Learning Platform — has been granted funding from the Department of Defense as well as grown its client base of commercial Enterprises. The platform uses virtual and extended reality that "enables organizations to rapidly create, deploy, measure, and sustain cost-effective, secure, and centralized immersive training programs, all within engaging, fully interactive virtual environments," per a news release.

“We have been looking to secure outside capital to accelerate the growth of our EMPACT platform and customer base but we hadn’t found the right partner who provided an investment vehicle that matched our needs,“ says HTX Labs CEO Scott Schneider in the release. “We found everything we were looking for in Cypress Growth Capital. They have a non-dilutive funding model that aligns with our capital expectations and have the level of experience that really makes this smart money.

"Cypress has a decade-long track record of success in helping emerging software and services companies achieve scale," he continues. "It is clear that the team’s collective entrepreneurial and operating experience will be of tremendous benefit to us as we focus on expanding our customer base in a very intentional way.”

The fresh funding will go toward growing and scaling the company's operations — both within the current Department of Defense and expansion opportunities into key commercial markets, like heavy industry, manufacturing, and higher education. Additionally, the funding will support increased customer adoption.

“Scott and his team have built an exceptional business that is poised for dramatic growth,” says Cypress Partner Pat McCaffrey in the release. “HTX Labs’ modern, immersive training solution provides clients with a force multiplier for modernizing training and an unmatched ROI.”

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