How To Make Your Supply Chain A Growth Generator
Nick Ostdick - October 31, 2017
Modern day supply chain management is often about finding reductions in costs, expenditures, wasted resources, or misallocations in how raw materials are spread across complex manufacturing networks and value chains. But this worldview often neglects or places little value on the fact that supply chains in and of themselves can be a key driver in affecting growth, increasing revenue, creating business moments, and forging new partner networks or footprint expansion.
But, as with almost anything in modern SCM (supply chain management), such achievements are often more easily discussed than realized. However, that doesn’t mean manufacturing companies don’t have the tools necessary to transform their supply streams from merely a vessel of procurement and product distribution into an important vehicle for engineering long-term, sustainable growth and productivity. Forward-thinking planners and managers can, with relatively minor adjustments to their SCM strategy, create a supply stream with the power to not only drive growth and innovation, but also the capacity to generate real revenue for companies in an increasingly competitive marketplace.
To help better understand how manufacturing companies can turn their supply chains into true growth drivers, let’s examine a number of concrete methods these companies can deploy to make their supply streams true, value-added growth generators in today’s complex, global landscape.
Integration and digitization of processes
Today’s manufacturing world has long since moved beyond the spreadsheet, Excel-based data management, or other manual methods of entering, managing, and distributing analytics. But planning, production management, and transportation logistics have also moved into the digital realm. This not only allows manufacturing companies to enter a completely digital arena from planning all the way through delivery, but it also makes it easy for companies to integrate any number of production-cycle processes via cloud technology, advanced computing, and other machine-learning based platforms. In addition, the move toward and widespread adoption of Industry 4.0 theory and The Internet of Things (IoT) means companies have more power than ever before to identify areas of waste within their supply streams, optimize costs and resource allocation, and leverage lean manufacturing principles to not only reduce operational costs, but increase the productivity and profitability of their sales, planning, production, and operations processes.
Transport management and logistics
We’ve discussed before on this blog how transport logistics in today’s varied, complex partner networks is not a fixed-cost proposition. With so many variables in play (routing delays, fuel costs, load variances, and other elements), a transport logistics strategy is a critical driver in helping manufacturing companies move products as quickly and seamlessly as possible. But companies can leverage transport management and logistics into a method for driving growth and revenue. Whether it's identifying new transport routes or fleet management options to incorporate new partners, or simply expanding distribution channels to help meet customer pools, transport logistics can help manufacturing companies more efficiently and in greater volume move products from Point A to Point B while also opening up new lanes for customer growth and expansion.
Advanced reporting and analysis
There was a time not too long ago when detailed reporting and analytics meant days or even weeks lag time from when data was gathered to when reports were generated. This meant operations were conducted based on previous (and often time flawed or outdated) planning models where planners and managers had little visibility or insight as to a company’s overall supply situation in the moment. However, because of the advent of advanced analytics and other highly-detailed data analysis models, manufacturing companies can view their supply streams in real-time and make instantaneous decisions or adjustments based on restraints or alterations in planning models. This not only helps companies avoid bottlenecks or breakdowns, but it also help expose areas of opportunity and allows companies to exploit these opportunities for greater customer satisfaction and increased sales potential.
Eliminating silo-based workflows
Today’s supply stream can no longer operate in cross-organizational silos. The integration of various technologies and the enhanced ability for various touch-points across the value chain to communicate and collaborate has rendered silo-based planning and production programs a significant liability. But the elimination of these silo-based workflows also means manufacturing companies have greater potential to understand how their value chain function internally and how to leverage that understanding into a more efficient, production supply stream. Because data, reporting, communications, and other documentation can be managed via the cloud in a centralized hub, different parts of the production cycle can more effectively communicate, share ideas and insights, and ultimately work in tandem to create a more visible, agile, and responsive supply chain. This means manufacturing companies that operate under this model will not only be better equipped to mitigate the risks inherent in variant-rich industries, but they will also be better suited to seize business moment and opportunities based on the transparency and availability of information.