How to Master Production and Supply Chain Management: Tips from Fireworks Industry
Fourth of July fireworks and the people, technology and processes behind them epitomize some of the biggest challenges in scalability, inventory, quality control and flexibility in an extraordinary way, yet this is all routine for the fireworks industry. Here, Knowledge Center contributor Rick Gallisa explains how we can all take a few tips from the fireworks industry on how to carefully manage production processes and supply chain activity on a global basis.
Today, Americans celebrate independence from Great Britain by chucking 250 million pounds of fireworks into the air. Our childlike fancy for things that go boom, crackle and pop with the showmanship of bright colors and explosive drama masks the complexity behind the once-a-year celebration. This is a complexity not unlike challenges faced by many large manufacturers.
In fact, we can all take a few tips from the fireworks industry. This is an industry that has nearly doubled in size over the last decade. It's one that faces regulations by the United States Consumer Product Safety Commission and even state-by-state laws about which fireworks can be sold. To top it off, the entire industry sprouts up virtually overnight each year to sell most of their annual revenue in product in less than a month.
We talk about "flexibility" and how companies struggle to scale their infrastructure for rapid growth or decline, meet shifting market conditions or become "demand-driven." But here's an entire industry of companies that this year will support a billion dollar market in weeks, then suddenly vanish almost entirely. Nearly any manufacturer that sells physical goods is trying to reduce their supply chain costs. Here's an industry that last year shipped 45,000 pounds of explosives across an ocean for a single fireworks show in New York-a shipment monitored by an aircraft carrier.
The right inventory level
Fireworks companies have to manufacture year-round to save up for the Fourth of July and that means a lot of inventory that needs to be kept in a cool, dry place-which will expire if it's kept around too long or explode the entire factory if exposed to flame. In this case, belated shipments, spoiled inventory and excessive (or not enough) inventory are all a year-long project that's put to the test in an instant. One mistake could weigh heavily on an entire year's financials or even doom the company when suppliers aren't armed with the products they need at the only time of year they need them.
While your distribution model and purchase behavior may not be quite as extreme as that of the fireworks industry, you probably still have need for carefully managing production processes and supply chain activity on a global basis.
Quality control perfection
The United States Consumers Product Safety Commission estimates that approximately 7,000 people a year are treated in emergency rooms for fireworks-related injuries-yet almost none are from fireworks that explode early or in unpredictable directions. Regulations, consumers and fireworks shows expect 100 percent perfection-and for good reason. Meanwhile, fireworks companies are in a race to capitalize on every moment of the pre-festivities sales boom.
This level of quality control under tremendous pressure doesn't come naturally. It's embedded into the fabric of everything the fireworks industry does and it's a process enabled by technology.