Manufacturers know that managing costs is crucial. To develop supply chain resilience, companies need to understand where their vulnerabilities and potential losses lie. Then they can take concrete steps to lower these risks.
Most manufacturers still weren’t prepared for the unanticipated disruptions of the past year. Faced with country-specific supply chain challenges, and shortages of critical parts such as computer circuitry, manufacturers in the United States are rethinking supply chain management and supply chain resilience.
5 Ways to Improve Supply Chain Management
There are five areas that manufacturers should pay special attention to in order to improve supply chain management and minimize potential disruption.
- Understanding and Using Data
Manufacturers who can collect, manage, read, and interpret data from all points on the supply chain and throughout their companies can remain ahead of potential supply chain disruption by anticipating problems. The ability to collect and manage large amounts of data is made easier by the use of enterprise resource management (ERP) systems with business intelligence (BI) to help interpret and use the available data.
Data alone, however, is useless if it goes unused. Data must be reviewed and analyzed for trends. Once trends are spotted, they can be used to predict supply chain problems. Managers can take preemptive steps to mitigate risk, such as lining up alternative sources of critical components, raw goods, and resources.
- Compliance Management
Nearly all industries today work under a series of laws, regulations, and guidelines for manufacturing. Keeping track of the ever-changing tax codes, FDA regulations, OSHA safety requirements, and myriad other regulations can be a full-time job. Multiply that by the number of regions worldwide that your company transacts business with, and you can see how managing compliance can be challenging.
Manufacturers must be careful to follow all pertinent requirements. The trick, of course, is to understand which ones you must follow, and which are merely guidelines. If you work with particularly challenging industries or countries as part of your supply chain, consider working with a third-party consultant well-versed in that industry or region to offer guidelines and advice.
- Develop contingency plans
Research potential suppliers well in advance of emergency needs. Spread out your suppliers, if you can, across multiple areas, so that if a disaster should strike one area, a supplier in a different area remains unaffected.
Lastly, as your company does face and overcome challenges, make sure you take time to document both the challenges and the solutions. Save these in a place where other managers can take advantage of them and use them as possible springboards for further what-if planning.
- Continually assess suppliers
Another aspect of supply chain resilience is constant assessment, or reassessment, of suppliers. Never take a single supplier for granted. In addition to having several backup sources of critical components, continually evaluate the service, quality, and prices of the materials you’re sourcing.
This is another area where a database such as an ERP for manufacturers can come in handy. Cloud ERP systems are available through a shared network anywhere someone has internet access. As you source vendors nationwide or even worldwide, your managers can make notes directly into the ERP system and share their assessments with everyone else on the team.
- Focus on improvement
Focus on constant improvement within your company. This includes a training system that offers continually training on all aspects of management.
A company where everyone is trained to assess suppliers is a company focused on value, quality, and service. A company that trains its management team to review and utilize data reports from the ERP so they can monitor emerging situations is a company that’s nimble, flexible, and adaptable. It has a stronger supply chain than competitors who may not take the time or effort to offer training.
Choose Acumatica for Effective Supply Chain Management and More
Acumatica Cloud ERP gives manufacturers a complete view of their business in real-time. Managers can log in from anywhere to monitor the supply chain, customer accounts, purchasing, scheduling, and much more. Discover what Acumatica has to offer by contacting us today for your free consultation.