The global supply chain continues with significant disruptions, putting a strain on many manufacturing and distribution businesses’ planning, sourcing, inventory, production, and logistics processes.
Even with the supply chain market expected to grow to nearly $40B by 2027, only 22% of companies operate within proactive supply chain networks. These companies struggle to catch up or stay afloat.
What caused the recent supply chain disruptions? Supply deficiencies fighting against high product demand due to labor shortages, changing trade routes, and port havoc– the supply chain appears now more like a crumbling system showing little sign that relief is coming soon.
Modern manufacturers and distributors must build resilience and agile supply chain strategies to handle the disruptions while developing solutions for long-term growth. But how?
If your supply chain processes are suffering, it’s time to consider cloud technology as your next crucial investment.
The Journey to Recovery
The first step to recovery is resolving your short-term dependencies and supply chain gaps. Take just in time (JIT) supply chain business models as an example: they are no longer capable of handling the current disruptions of the global supply chain market.
For instance, with just-in-time inventory, the focus is on optimizing inventory by sourcing only that which is necessary. While this works in a market where the movement of goods from source to production is seamless, the current transportation havoc overseas and through continents makes it a risky business model to rely on.
Assess your entire supply chain operations and partners. Have honest communication with your vendors and determine when and how they plan to supply your products or raw materials. Talk to your employees and figure out the roadblocks they currently encounter and ways to mitigate said issues.
Where Cloud Technology Helps
Predicting the future of the supply chain is nearly impossible. Nonetheless, cloud-based technologies like ERPs provide solutions that allow manufacturers and distributors to analyze and forecast their supply chain operations long term.
Cloud-based ERP is incredibly capable at offering manufacturers and distributors diverse supply chain solutions that propel businesses towards sustainability and growth in the following ways:
Using Data To Enhance Operations
You need to empower your business with data. A cloud-based ERP is a single solution that connects your supply chain data sources in a centralized location. The ERP seamlessly integrates the data with your manufacturing and distribution applications to enhance your operations.
For instance, you can gather extensive customer demand data to identify what you need to produce to meet their needs. This then helps you identify the raw materials you need, the quantity and quality of the raw materials, the availability, and the capability of your vendors to meet your needs.
If your overseas suppliers cannot meet your immediate demand for materials, you can then start looking for alternate suppliers in your region.
The advantage of using an ERP solution is that it continuously generates this type of data. But you must additionally know how to analyze it, authenticate its relevance, and use it to make informed business decisions to enjoy its maximum value.
Optimizing Supply Chain Operations
The modern ERP comprises many tools in one to automate and manage processes for maximum efficiency and productivity. Additionally, optimizing your supply chain by using ERP solutions means enhancing your business’s planning, sourcing, inventory, production, and logistics operations.
The data you gather from the ERP system helps you achieve an optimized outcome on all your supply chain processes. For instance, in our example above, your company data pinpoints the exact materials you need based on customer preference.
The ERP analyzes such data and forecasts for the future, assessing the type, amount, and quality of materials you need to fulfill customer expectations for a period. You only spend the right amount of investment in gathering suppliers and inventory.
Take a look: Manufacturers and distributors learn how to determine their software requirements
In a word, this is optimized planning because it reduces waste within your supply chain process. Another example is using gathered data to list down a variety of suppliers for your raw materials from local and overseas regions and determining the cost-benefit analysis of each, then using the result to prepare a list of suppliers to form relationships.
Gaining Agility And Resilience
You need a strong business strategy to support your supply chain long term. This outcome is built on getting relevant data and analyzing and interpreting it in real-time.
It also stems from the capability to use this type of data to make decisions that can handle the global supply chain’s current and future unexpected disruptions. With a fully integrated ERP solution, you get business agility and resilience within your manufacturing business.
Change And Growth Are Inevitable
There’s no questioning that the current supply chain models need to change to accommodate the disruptions evident in the market. The good news is that cloud technology and ERP solutions offer the proper tools to propel the industry into sustainability in the future.
But first, change must occur. Which begs the question, how far are you willing to go to make your manufacturing and distribution business more agile and resilient amidst a world of disruptions?
Learn how we use Sage Intacct to make agility and resilience within your reach.
FAQs
What is the cause of the global supply chain disruptions?
Some of the main issues causing the supply chain disruptions are labor shortages, the slowdown of important ports, slow distribution, and the changing supply routes.
What is the role of data in modern supply chain operations?
With adequate and relevant data, you can quickly identify challenges, trends, and customer expectations within your supply chain operations. Analyzed data also provides the insight you need to make informed business decisions.
What is the role of cloud-based ERP in supply chains today?
ERP automates your supply chain operations and integrates other processes in your business with your supply chain to provide a single source of business data, operations management, and process workflow. You can see your orders, scheduling, and other types of information in real-time and in one central location.
