This month's question: How is your co-op/PPD working through the recent supply shortages?
Answer: It has been over two years since COVID-19 began. This global pandemic has affected our lives, both personally and professionally. At Carroll White REMC, we have a proactive team. We work well together to make materials available for daily operations as well as certain emergency situations for our nearly 15,000 members. Early in the pandemic, we began to understand the tremendous effect that COVID-19 was going to have on our business—the global supply chain being one. The rise in cost of materials and transportation along with delays and shortages has caused a serious domino effect. We took immediate action by ensuring that we had an adequate supply of materials in our inventory to operate our cooperative. I continue to track our inventory and look ahead for signs of shortages. This allows me to order supplies to have available for work sites. We need to use our limited resources and keep planning for the unforeseen. We need to identify risks, diversify supplies and suppliers and recycle materials. When we retire a line, we attempt to recycle whatever material we can as a backup supply. Here at Carroll White REMC, all departments work together in planning jobs ahead of schedule. This allows us to calculate materials in inventory, track supplies at job sites, order supplies in advance if needed, then access and communicate with suppliers to ensure material is on schedule.
Answer: Three things are helping me deal with inventory challenges: prioritizing projects, keeping a close eye on inventory and maintaining strong working relationships with peers and vendors. I work with our engineering and operations departments to determine which projects are necessary and how they will affect our inventory. Some customer projects are on a waiting list until we can get material to build them. We reserve some material so we can make repairs and restore power if a storm passes through our territory. We are constantly checking our inventory because we don’t want to wait too long to place orders for material. Pre-ordering or carrying higher-than-normal inventories can sometimes help. We’re looking at our five-year averages for material use to give us guidelines for future purchases. Dawson Power has good relationships with our vendors. We’ve also been talking with neighboring public power districts about working together in a buying group. Our hope is that a group will increase our buying power.
Answer: Transferring into purchasing for Horry Electric Cooperative over 15 years ago, I’ve seen many changes in our supply chain as we grew from just over 61,000 active accounts to more than 84,000. However, none of these compare to the changes over the last couple of years. With the supply chain being brought to the forefront recently, everyone has become aware of issues like raw materials, logistics and employment concerns that manufacturers are facing. We’re fortunate to work with great suppliers, one being CEEUS, which is member-owned by the Electric Cooperatives of South Carolina. The rapport they’ve built with manufacturers and representatives have helped us along the way. Several national and local suppliers have gone above and beyond to help us make it through shortages as well. Utilizing multiple vendors and manufacturers for like-kind items with different lead times has been one of our strategies. We also couldn’t do it without teamwork. Warehouse personnel keep purchasing informed on inventory levels. In addition, IT writes forecasting reports. Operations and engineers have discovered alternative ways to complete jobs, which helps with the use of materials. Altogether, the support of our administration and staff during these times of rising costs has been phenomenal. Through cooperation and communication, I feel we can continue to provide reliable service to our members, in addition to providing new services for our growing local economy.
Answer: Over the last two years, we have seen prices rise quickly along with material lead times, which has caused us to change our behaviors around sourcing materials. Rather than merely working within our warehouse minimums and maximums and looking at major projects, we started looking at our five-year averages of annual consumption rates of materials. In order to stay ahead of the lead-time curve, we placed orders for future years to be sure materials will arrive at the appropriate time frame. This has helped us be prepared for major projects, maintenance and outages. However, the material landscape evolves quickly, and we occasionally run low on material during abnormal conditions. In these circumstances, a flexible response has been necessary where we have reached out to alternate suppliers for materials, considered different materials and equipment, and finally, revisiting standards. In rare cases we have made purchases from neighboring utilities when they have a surplus. The bottom line is, this environment requires proactive management of inventory and of the supply chain to keep warehouses full, material deliveries ongoing and, most important, to meet our members’ needs and to remain a highly reliable service provider.