The world as we knew it has changed, and there’s no going back. For many and complex reasons, supply chain disruptions have become the norm rather than the exception, and the onus is on manufacturers to adapt and strengthen their ability to react in an agile manner. More than ever, manufacturers need to create highly responsive organisations that can flex for changing market conditions.
A resilient supply chain can withstand the impacts of both short-term and long-term disruptions, can recover quickly, and meet business obligations without significant impact on service levels, but in a Gartner survey, only 21% of respondents said they have a highly resilient supply chain. So, what can manufacturers to do strengthen their supply chains?
Embrace digital technologies
While the pandemic pushed many manufacturers to adopt digital technologies at an accelerated pace, the continued evolution of the global market combined with supply chain constraints mean that they must continue along this path. Digitising the supply chain has a competitive advantage and is necessary to create transparency throughout the supply chain to address effectiveness gaps. Organisations leading the way in digital supply chains have put in place governance and data management oversight and forged the creation of supply chain platforms.
Unsurprisingly, it’s in manufacturers’ best interests to mitigate supply chain disruptions such as delays, shortages, quality issues, or increased costs, as these can have significant impacts on business’s operations. ERP systems help manufacturers minimise the impact of disruptions by enabling them to monitor, analyse and optimise their supply chain performance and, importantly, to react quickly and effectively to changing conditions and customer needs.
Without data insights, organisations are unable to see shifts along the supply chain and collaborate with customers and suppliers in real-time. With ERP solutions, industries can ensure a connected supply chain that integrates and executes actions by working holistically with each related department, for example, from assembly, to packing, right through to logistics. ERP allows businesses to integrate disparate systems, unifies data silos and accelerates the development and deployment of new services, which is critical in volatile times.
Boost resilience with reshoring
Although years of globalisation has meant that manufacturers looked far and wide for suppliers, recent years have had companies re-evaluating their supply chains, and more seriously considering their options to shorten supply chains and improve resilience through reshoring operations – bringing production closer to their home country or points of demand. Manufacturers must look at their manufacturing processes with clear eyes and redesign the process to allow maximum agility for completing and fulfilling orders in a hyper-competitive marketplace.
A survey by Deloitte found that about 75% of companies were planning to accelerate their reshoring initiatives by building smart factories closer to home locations, or their customer points of need. In addition to the potential of lower costs, reshoring has the added benefits of geographical proximity, time zone alignment, shorter lead times and better service delivery. While this may come with higher costs, with an increasing focus on ESG in the supply chain, customers are also looking for companies with transparent and carbon-efficient supply chains, along with products that are locally made.
Improve supply chain visibility
Manufacturers must be able to gather information and data all along the supply chain to understand with foresight what the challenges might be, and the internal and external factors impacting a business. Visibility across operations results in better data-driven decisions and helps resolve demand and supply imbalances.
Manufacturers must know their supplier network and be able to assess where risk lies, and the likelihood of adverse impacts should a supplier cause a delay. Adapting business processes and operations as global conditions change allows organisations to react more quickly to manage the disruptions along the supply chain. Fit-for-purpose ERP software and IIoT data inputs from throughout the supply chain can help manufacturers better predict and prepare for supply chain volatility. However, without analytics and the resultant insights, the data will not deliver significant business value.
Use data and analytics from all points of the supply chain
Using data and analytics from all points of the supply chain to maximise efficiencies and outputs is critical. Yet research conducted by SYSPRO indicated that only 20% of manufacturing and distribution businesses have looked at investing in big data analytics in response to the ongoing disruptions.
Without data insights, organisations are unable to see shifts along the supply chain and collaborate with customers and suppliers in real-time. Simultaneously, smart factories are providing more data points through IIoT devices and predictive analytics is becoming an increasingly powerful tool for manufacturers to anticipate downtime and supply chain snags.
Predictive ERP enables organisations to use what-if scenarios and predictive analytics to inform powerful insights. Disruptions are not only more likely to be predicted but contingency plans will be in place and quickly implemented across the entire operation.
Build long-term sustainability
The goal is long term sustainability in a volatile business environment, which is driving the need to adopt data-led decision-making across the supply chain. Manufacturers must drive increased collaboration and seamless connectivity across the entire organisation.
Creating an environment of visibility across all operations, with the ability to act decisively and immediately, is a necessity. An ERP system that delivers actionable business insight solutions improves business performance and provides real-time, business-critical insights for quicker analysis, decision making and execution, and through that, a resilient supply chain that enables manufacturers to meet their business obligations.
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