In a challenging business environment, supply chain resilience is critical for future-proofing your company.
For manufacturers and distributors, a resilient supply chain is essential for daily operations and long-term success. Supply chain disruptions can be hard to predict, and they can grind production to a halt. They can also cut into your bottom line: a single supply chain disruption can cost an organization 45% of one year’s profits over the course of a decade, according to McKinsey. Building a resilient supply chain capable of withstanding disruption will help you not only survive but thrive in an uncertain business environment.
Today, the foundation for a resilient supply chain is advanced digital technology. For supply chain managers, the modern global supply chain can look sometimes like little more than data points. As raw materials are moved around the world, creating parts that pass into manufacturing production lines and are eventually distributed to stores, every item and every part of the process can be tracked and traced.
No matter where your company lies on the chain, this flow of information is far too voluminous to manage with Excel spreadsheets and legacy ERP systems. When you factor in the looming disruptions, you end up with an infinitely complex web of relationships—and the need to use technology to enhance your supply chain visibility.
Cutting-edge digital technologies already exist to address these issues. The best supply chain management solutions make every link in your chain completely transparent in real time, so that you can account for every element that affects your operations.
This level of clarity is possible because modern supply chain solutions connect your systems, taking your information out of silos and into a centralized location. This allows you to be proactive in reducing inefficiencies, improving productivity, and planning ahead. When a supplier experiences a supply chain disruption, your system flexes to account for the change in information, enabling your decision-making process.
Underpinning these solutions are Industry 4.0 technologies like cloud computing, Internet-of-Things, and artificial intelligence (AI). With the ability to automate core functionality and collect and analyze big data, advanced technology can help you keep up with your suppliers’ technology while staying ahead of your competition.
Resilience involves quick responsiveness, something that’s best achieved when your supply chain management is part of a connected organization.
A connected organization is when you have fully integrated information systems designed to give the right person the right information at the right time, in an easy-to-read report or dashboard. This enables you and your employees to diagnose and resolve supply chain problems in a timely, accurate manner, whether you’re on-site, on the road, or at your home office.
“The move to the cloud has been a game-changer for us. ... We can share data freely and get it up and running as a supplier to our other sites, which has alleviated supply chain issues.”
Nicholas Mueller, director of ERP systems at Enjet Aero
This dynamic functionality exists when you deploy enterprise resource planning (ERP) in the cloud. Your ERP system brings together all aspects of your business into one centralized location, so that all information, from suppliers to customers to sales, is connected.
ERP systems were once deployed on-premises only, meaning that data servers that held your systems and data lived at a company’s physical location, where IT departments spent valuable time managing them. With digital technology, cloud computing emerged to give enterprises the freedom and flexibility to store information on servers geographically distributed and backed up, where IT professionals keep data safe, secure, and available around the clock.
In the global digital economy, cloud ERP is the fastest and most flexible way for business teams to work. It helps them achieve resilience by allowing them to plan for and respond to disruptions more quickly than their on-premises competition.
Once you’re deploying ERP in the cloud, you’re ready to take advantage of its capabilities. But building a resilient supply chain doesn’t happen overnight. It starts with strategy.
Massive shock events like port closures or canal blockages can drag companies into a chaotic muck that can throw supply cycles into reactive decision-making. To get away from this tailspin, you want to focus on a strong structure for your supply chain.
Modeling and testing are key to structure. Simulate how your products and processes will need to change if your suppliers experience disruption. The more data you have—for instance, you should know the entire material flow up and down your supply chain—the more accurate your models.
Develop “what if” scenarios to promote data sharing among suppliers. Not only does it help everyone identify weakness and vulnerabilities, but it helps develop end-to-end structural resilience and strengthens every link in the entire chain.
As we noted earlier, a supply chain is less of a single-track path than a complex web of interactions. Seeing the whole structure clearly is a great start, but only with advanced analytics can you get actionable insights.
Modern supply chain resilience emerges out of AI capabilities like machine learning (ML), where data solutions move beyond descriptive analytics to predictive analytics. The ability of ML to spot patterns in massive datasets can make your forecasting more accurate and increase your confidence in planning and logistics.
Advanced analytics also help you remain agile. As your systems accumulate data, they flex, scale, and grow. Instead of slowing down from too many new information sources, they process data quickly and automatically. This helps relieve you of manual data operations and frequent troubleshooting, so you can focus on business growth and success.
Resilience is a concept focused on the long-term. But it can be tough to weigh those considerations when faced with yearly uncertainty and quarterly volatility. When you experience success in one period, you may be tempted to grow indefinitely. But that can have its own cost by stressing supply chains.
In building supply chain resilience, there is no magic solution or crystal ball. But you can get ahead of the changes by leveraging tools that help you make the most informed decisions about how to create and manage success now and in the future.
For manufacturers, delays in raw materials and other supply chain issues can slow down production and divert employee resources, which can create compounding problems given the manufacturing labor shortage.
The best supply chain management solutions have multiple high-impact capabilities to withstand these disruptions and build resilience. Demand management uses statistical forecasting to help you improve fill rates, while purchase management allows you to streamline purchase order writing while improving order accuracy.
With advanced material management, you can then monitor raw materials in real-time from a mobile device. As situations evolve, your system evolves with it.
For distributors, a resilient supply chain means having the continuous ability to simplify workflows to more easily satisfy customer demand. With inventory and warehouse management features, you can automatically monitor customer inventory and transfer products from your warehouse to their locations.
Critical warehouse activities, like receiving, cross-docking, put-away, picking, inventory adjustments, and cycle counts, are easy to manage. Demand forecasting helps take the guesswork out of ordering by identifying unique demand patterns of your items and automatically detecting seasonal or trending ones. When you have this level of visibility into your supply chain, you can feel more confident in handling any situation.
Learn more about Epicor supply chain solutions in manufacturing and distribution.
