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Raw Material Supply Interruption Case Study 

The Challenge 
Our client an industrial manufacturer based in London faced an unexpected supply problem with a key raw material. The material was a chemical hardener, which was single sourced with no alternatives readily available. 
 
The material was normally ex-stock from a UK distributor however, the supplier suddenly declared it unavailable for a minimum of six months and provided no further details.  
 
The Impact 
An immediate stop in production of a high demand product range for three weeks, affecting 20% of total sales. Our client did not hold any safety stock expecting the material to be readily available. 
 
Root Cause & Solution 
 
On investigation, by Purchasing, it was discovered the material was sourced by the distributor from a dominant European chemical manufacturer. It was made in a single factory based in China that had suffered a major explosion and fire virtually destroying the plant, hence the six-month lead time. The manufacturer had no other source and told customers to find an alternative or wait. The Purchasing team reacted and were able to source an alternative but only after an intense and costly program of re-validation and customer verification. 
 
ASM was engaged to support the business, an immediate solution was to increase safety stocks, identify alternative products and contracted a stocking program with the supplier. Using their online assessment platform ASM identified several other areas of potential supply interruption and measures were implemented to mitigate these risks. 
 
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