After years of ongoing global supply chain disruption, 2021 marked a year of supply chaos that reached new heights and even affected Fortune 1000 companies.
Supply chain disruptions are nothing new, but the pandemic caused remarkable disorder. Many factors are to blame, including factory closures, travel bans, and lack of workers. The impacts of the pandemic varied by sector, but all sectors were affected.
As a result, U.S. manufacturing and distribution companies of all sizes started looking for ways to downgrade their growth projections.
Where does this leave those manufacturers and distributors who are feeling the effects of the supply chain disruptions but still want to find ways to grow through the chaos? With the number of supply chain disruptions continuing to rise, these companies need to hold on to their growth mindset.
If you are a manufacturer or distributor, how can you make meaningful change, not just today but for the uncertainties of the future?
Not Just Any Path of Action
It’s not merely enough to act, you must take the right actions. Step back and determine how the global supply chain disruption has impacted your customers, suppliers, and employees.
- Are your customers complaining of low stocks?
- Are your suppliers asking for more time to deliver raw materials or products?
- Are you fully staffed or laying off employees?
- Do employees feel motivated regardless of setbacks and slow inventory purchasing processes?
Getting these answers can simplify your supply chain complexities and delays and help you get to the root cause of your supply limitations in an evolving marketplace.
Once you’ve drilled down, begin analyzing your responses. Your current system has likely proven insufficient in handling operations through all of this disorder. Determine what action you need to take to respond to the immediate supply chain issues while preparing for future unexpected outcomes.
This will require you to mobilize your leadership, create a response plan, standardize processes, draw a prioritization roadmap for your supply chain ecosystem, and optimize the system to execute your protocols with minimal error and redundancy.
In other words, streamline operations as much as you can.
You’ll need a system that can help you analyze current and potential future scenarios based on trends and expected outcomes in the supply chain. Then use insight from the analysis to prepare for possible change.
Need for Transparency
Trace your entire supply for a broad view mapping of “what if” scenarios. This is where you leverage data. Data you collect from your supply chain operations give you visibility into customer demand, supply capacity, inventory, and your finances.
Short term, conduct an extensive data-gathering exercise starting with customer demand and throughout your supply chain to your suppliers and the raw material you need. Ensure the data you collect is relevant, and then use it to identify where you are as a manufacturing and distribution company.
If you determine one of your suppliers can’t supply the raw materials you need on-demand, use this information to consider alternate supply sources.
Use Visibility To Build Resilience
Being resilient gives your manufacturers and distributors the flexibility and agility to thrive in a disruptive market. Once you have the data and resources to run your manufacturing and distribution operations, you can address current bottlenecks and predict challenges ahead.
Now you can position your operation for resilience.
You’re also able to create customer demand centered on customization and personalization. By establishing a flexible supply chain, you can balance supply and demand amidst a changing economic environment and stabilize operations.
Flexibility Beyond the Supply Chain
Manufacturers and distributors can mitigate some of their staffing headaches by offering employees a flexible working environment to boost morality and productivity. Advise your teams to take care of their mental health concerns as much as they do their physical health. Fostering an environment that shows you mean it builds resilience among staff.
But don’t settle on building resilience. Instead, create a resilient framework within your supply chain for the future by establishing risk management strategies that work within your newly flexible, agile, and transparent operations.
This means leveraging machine learning, artificial intelligence, and applied analytics to identify possible disruptions. Risk response should be a substantial part of your business capabilities, protocols, and operations.
The Disruption Mitigator
When handled right, chaos becomes an avenue of opportunity. But to mitigate the current supply chain disruptions in the future, manufacturers and distributors must address every aspect of the business and its financial implications.
With the advantage of technology solutions like Enterprise Resource Planning (ERP) to ease data collection and analyze relevant information, you get the insight you need to make better decisions.
Data collected from your ERP can improve financial visibility across the supply chain ecosystem and boost cash flow, which, in turn, protects business operations. As a result, you can easily navigate changes, risks, and disruptions without jamming operations.
A fully integrated ERP solution like Sage Intacct continuously generates, analyzes, and tabulates your data, making purchasing, manufacturing, and distribution decisions a more effortless process and helping you navigate through this disruption.
How can a manufacturer mitigate supply chain disruptions in the future?
Start by gaining visibility into the supply chain network, check and confirm the ability your suppliers have to provide the raw materials and products you need and expand your supplier network if required. Then monitor your operations and protocols actively with risk management in mind.
Does ERP solve supply chain disruption issues?
It can help boost your operations by combining different functions within your business, which, in turn, enhances your efficiency. For instance, an ERP solution can streamline your inventory, billing, and delivery operations, making managing your cash flow and inventory control more accessible.
Why is resilience in manufacturing and distribution so important?
Resilience prepares your manufacturing and distribution company for future changes or disruptions because it provides agile and flexible capabilities to your operations.
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