Supply chain resiliency & visibility in manufacturing

Recent global events have brought the words “supply chain” to the front page of news sites and reports everywhere. The disruptions manufacturers faced recently have resulted in ongoing consumer shortages worldwide (think toilet paper and semiconductors). In this piece, we take a look at how manufacturers can create resiliency and visibility in their supply chain to minimize future disruptions.

Creating visibility and resiliency in manufacturing supply chains.

Definition of supply chain visibility
The ability of stakeholders to access real-time data related to the order process, inventory, delivery and potential supply chain disruptions.
Benefits of increasing supply chain visibility
Reduced impact of disruptions, cost-saving opportunities, improving trust, traceability and accountability (internally and externally).
Definition of supply chain resiliency
The capability of a manufacturing supply chain to ensure and preserve the continuity and consistency of product supply and meet business obligations for product delivery and service to customers by anticipating and being prepared for both short-term operational and long-term strategic disruptions.
Capabilities needed in a resilient supply chain
Network agility, digital collaboration, real-time network visibility, rapid generation of insights, empowered teams.

Let’s start first with what the terms supply chain visibility and supply chain resiliency mean.

Supply chain visibility

“Supply chain visibility is the ability of stakeholders to access real-time data related to the order process, inventory, delivery and potential supply chain disruptions.” - IBM, Supply Chain

In manufacturing, lack of visibility for transactional, production, fulfillment and inventory data is a major hurdle. With real-time insights from integrated systems, business users can make use of the right information at the right time, making sure that shipment and order issues are handled quickly.

By implementing artificial intelligence (AI) capabilities, manufacturers can use this integrated data to get real-time intelligence and actionable recommendations that can reduce the time it takes to fix disruption from days to hours. These types of data-driven insights can uncover opportunities for process improvement and reduce operational costs. Manufacturers can then further securely extend that shared, real-time data to supply chain trading partners, suppliers and customers, broadening the visibility and increasing overall supply chain resiliency.

Benefits of increasing supply chain visibility

Reduce the impact of disruptions: manufacturers can build resilience into their supply chain using AI-powered alerts and actionable insights from cycle-time predictions that use machine learning, pattern detection and historical trends to identify anomalies hidden in transaction data and predict future events.

Unlock cost savings opportunities: process improvements that include digitizing error-prone manual tasks, and making the order process autonomous reduce the workload on the employees and provide cost savings in mistake mitigation. By integrating operational systems and improving data flow allowing teams to do more with data, both in and outside the organization, manufacturers can achieve new levels of supply chain visibility and mitigate costly interruptions to product delivery.

Enhance trust, traceability and accountability: increasing visibility in the manufacturing supply chains by enabling secure track and trace of products with a distributed, shared data source that creates a single version of the truth for all stakeholders and gives near real-time insights into operations across the board builds trust and confidence in meeting deadlines, exceeding customer expectations and reducing stress across the supply chain.

Supply chain resiliency

As manufacturers are designing the path forward, they are paying close attention to supply chain resiliency and the need for stronger, tech-enabled business supply networks that can withstand disruptions.

According to IDC Manufacturing Insights, supply chain resiliency is “the capability of a manufacturing supply chain to ensure and preserve the continuity and consistency of product supply and meet business obligations for product delivery and service to customers by anticipating and being prepared for both short-term operational and long-term strategic disruptions.” - Global Trade, How are Manufacturers Building Supply Chain Resiliency?

Five capabilities needed in a resilient supply chain

Network agility
Reacting quickly to disruption requires a flexible ecosystem of suppliers and partners that can handle sudden changes in supply or dramatic increases in demand. That can mean:
1. Setting up alternative manufacturing sites and assembly nodes ahead of time.
2. Making the most of Industry 4.0 tools to optimize cost.
3. Developing tailored solutions for each segment of the supply chain and connecting them to each other.
4. If dependent on offshore production, move some manufacturing onshore or closer to core markets.
Digital collaboration
Improving information flow and sharing that data with suppliers, partners and customers in an efficient way increases supply chain resiliency. Consider the following:
1. Cloud-based supply chain applications and collaborative platforms and tools to enhance information sharing.
2. Building business automation and process improvements to make the supply chain more autonomous and sharing that technology with suppliers to increase their resiliency and therefore improve the entire supply chain.
Real-time network visibility
By implementing solutions that integrate data across the entire supply chain, leadership teams get real-time visibility to all the information they need to make better decisions. Improved reporting and real-time assessment can include:
1. Coordinating supply with forecast demand by comparing internal production capacity data with real-time demand signals such as weather data.
2. Streamlining connectivity and increasing transparency with customers, suppliers and trading partners across the supply chain by digitizing and automating transactions using a digital business network.
Rapid generation of insights
Leadership teams can stay a step ahead of supply chain disruptions by:
1. Improving their ability to rapidly analyze internal data and external sources of big data.
2. Harnessing machine learning and artificial intelligence for predictive and prescriptive analytics.
3. Deploying early-warning technologies, modelling risk scenarios and developing pre-programmed responses.
Empowered teams.
By decentralizing teams and giving them the direct power of real-time, integrated data, manufacturing groups can:
1. React quickly to insights generated by advanced analytics.
2. Create rapid-recovery capabilities that will help companies navigate smoothly in times of disruption.

Recent events have shown manufacturers how vulnerable distant offshore supply chains have become. It has also highlighted the need for better visibility and communication between suppliers, customers and manufacturing organizations. The number and intensity of disruptions and shocks to the global economy are increasing. Companies that begin investing today in a resilient supply chain will be best positioned to weather the next event that obstructs the global flow of goods.

Investment in digital solutions to improve the flow of information between operating systems is the first step in improving supply chain resilience for manufacturers. If your business is looking for the next steps, or in search of guidance, reach out to our team at Acro Commerce.