For many manufacturers, the process of building efficient, sustainable supply chains is becoming increasingly difficult
Customers, including dealers, distributors and end-users, are getting more demanding. The pressure is on to achieve faster lead times. Manufacturers must ensure they don’t fall behind by their rivals in the race to deliver faster, more efficient customer service.
They also need to make their supply chains as sustainable as possible. Pressures to minimise the environmental impact of operations are growing. Organisations need to show they are serious about sustainability to build successful supplier partnerships and enhance customer engagement.
So how can manufacturers best address these challenges? There is always a temptation to throw resource at the problem. However, depending on the market and seasonality, there will be restrictions on the availability of labour. The employment costs of bringing on large numbers of new workers may be prohibitive.
Integrated processes and connectivity to fully automated machines are key to delivering supply chain efficiencies that will help meet the challenges highlighted above. But to stay competitive, manufacturers must also ensure they implement the IT systems they need to support these automated processes.
The advent of the Internet of Things (IoT) is driving enhanced connectivity across the supply chain, thereby supporting streamlined processes. Robotics and the latest transactional information systems can help manufacturers to operate more efficiently and gain a broader insight into how their supply chain is working.
At a granular level, AI can help manufacturers predict how demand is likely to change based on the latest weather forecasts, seasonality or historical data patterns. They can then use that data within automated processes that position and then rearrange stock for picking processes based on projected demand. As a result, throughput is increased. customer demand is met more effectively, operational costs are cut and the whole warehouse management process becomes faster and more efficient.
At a more global level, supply chain visibility is another increasingly AI-driven capability. Having visibility of stock availability across the globe, for example, could be crucial in enabling businesses to decide where best to source goods from. This end-to-end visibility is key to the successful running of any global supply chain today but it also needs to be combined with global consultancy. To effectively manage and shape the supply chain of today and tomorrow, manufacturers need a strong international consulting capability with hubs not just in Europe and the US but also in China and other locations around the globe.
Having a global supply chain is a must for many large businesses today. They offer companies the opportunity to have access to higher volumes and a greater variety of inventory and they can enable them to more quickly and easily tap into new international markets. Making such extended automated supply chains sustainable could be seen as challenging.
The reality is, however, that global supply chains can be fully sustainable as long as the right processes and technologies are implemented. Technologies that drive efficiency will enable the supply chain to support cuts in costs by facilitating reduced resource consumption and improving productivity. Supply chains will also be more sustainable if technology can help ensure items are moved more quickly to their destination; there is little double-handling, full loads are transported and optimal routes taken.
The latest technologies also have the potential to drive enhanced revenues and productivity by streamlining and automating processes, and enabling manufacturers to sell and ship more goods or materials more quickly. They can help build better customer engagement, thereby reducing churn. They keep a lid on costs through streamlined automation and they allow manufacturers to forecast accurately and plan more strategically. Indeed, if manufacturers are to overcome the challenges they face in running global supply chains, new technologies and connectivity are ultimately certain to have a key role to play.
About the Author
Richard Seel is Managing Director, Supply Chain & Logistics (UK & US) at delaware. delaware is a fast-growing, global company that delivers advanced solutions and services to organizations striving for a sustainable, competitive advantage. We guide our customers through their business transformation, applying the ecosystems of our main business partners, SAP and Microsoft. We continue to service our customers afterwards, assuring continuity and continuous improvement. In all perspectives, we apply our own sustainable business model that aims for the long-term.