Part of Solutions Review’s Premium Content Series – a collection of columns written by industry experts in maturing software categories –Paulo de Matos, the Product manager at SYSPROdetails how ERP solutions can help manufacturers and distributors solve problems in their supply chains.
Supply chain disruptions are inevitable, but over the past few years they have certainly increased in severity and frequency due to trade wars, natural disasters, major supply disruptions, the pandemic, and more. recently, of the Russian-Ukrainian war. For example, power shortages in China which affected large-scale generation, Brexit in the UK, US trade embargoes on China, The obstruction of the Suez Canal and the Russian invasion of Ukraine have all caused delays and bottlenecks around the world.
In a recent Gartner survey76% of supply chain managers said their business faced more frequent disruptions than several years ago. The increasing complexity and length of international supply chains means manufacturers and distributors must consider a combination of tools and approaches to be more agile in the face of day-to-day and long-term challenges.
With more reliable data from solutions like Enterprise Resource Planning (ERP) systems, industries can use data analytics to predict disruptions, understand their scale and impact on the supply chain, and formulate a response to mitigate the effects before they happen. Here are some key supply chain challenges and how ERP helps companies gain the control they need in their operations while increasing efficiency and overall customer satisfaction.
Challenge 1: Linear supply chain models
Many manufacturers and distributors have a linear supply chain model. This means that when one factor in the supply chain breaks, a snowball effect ripples through the entire process. Simplified approaches can reduce costs and increase efficiency during the status quo, but are unable to cope with supply and demand shocks. When global supply chains are disrupted, a stripped supply chain can prevent factories from meeting demand and exacerbate an economic downturn.
Solution: Adopt supply and demand plans based on real-time information
Forecasting and managing supply and demand are essential for today’s global supply chains. An ERP solution that is integrated with various business functions can allow manufacturers and distributors to define their supply needs based on forecasted demand in the system. With the help of the right planning and predictive analytics tools, a business can ensure it has the complete picture and effective responses to risk.
Tools built into an ERP system, such as performance and risk indicators, often improve decision-making. For example, cBusinesses can react quickly to supply chain issues by adjusting prices based on demand while moving different products to drive revenue growth or increasing margins for a high-demand product with limited supply.
Challenge 2: End-to-end supply chain visibility and transparency
Faced with global operations, market expansions and stricter regulations, companies are overwhelmed by the massive amount of information from different suppliers and customers. Companies often contain internal silos, such as supply chain and purchasing, and external silos between companies and their supply networks.
Manufacturers and distributors often struggle with visibility of raw materials in production, which means they cannot effectively manage resources and streamline production processes. Therefore, every moving part of the supply chain must be carefully assessed and carefully monitored to ensure product is brought to market quickly and efficiently. That’s the challenge of manufacturing, but having insights across the entire supply chain can help improve the business process.
The solution: collaboration via a supply chain portal
Improving supply chain performance requires a single view connected to relevant systems and accurate, up-to-date data. This should also be accessible to all stakeholders. Managing and integrating data through a portal or portal dashboard gives the organization much-needed visibility and control over all its supply chain processsuch as procurement, manufacturing, storage and logistics. A supply chain portal also provides the ability to engage, communicate and connect with colleagues, suppliers and customers while giving manufacturers the control and agility they need to meet the changing needs and demands, ensuring shelves are stocked and ready to serve the market.
Developing a digitization strategy requires the support of senior management to ensure collaboration and the success of transformation initiatives. A recent survey reveals that 51% of manufacturing CFOs plan to invest in machinery, robotics and technology automation, and 61% believe that predictive models supported by meaningful measurement and reporting are needed to ensure that the company remains competitive.
However, plant management should set clearly defined strategies, objectives and key performance indicators that address business specific pain points to ensure the necessary return on investment. Without collaboration, alignment and effective change management, digitization efforts will not produce the desired results.
The solution: a digital roadmap
Building a more resilient, agile and predictable supply chain requires a connected supply chain. Information in digital format is the cornerstone of a connected supply chain, which relies on various smart technologies including automated warehousing, cargo tracking and remote fleet management. Although ERP is key to the digital transformation journey, organizations need a solid business strategy that underpins their supply chain strategy. Change management also plays a crucial role in engaging staff and ensuring that digital transformation efforts deliver the required results.
Organizations need access to accurate, real-time, and actionable data to drive customer satisfaction and business success. Manufacturers and distributors need a fully integrated ERP solution with built-in analytics meet their immense challenges by optimizing their business operations and satisfying customer demands while increasing plant production. Without it, businesses risk remaining in reactive mode. However, it has a competitive edge with more control over business operations.
The supply chain situation is tough right now, and it doesn’t look like it will get much better in the near term. However, the smart application of a robust ERP platform can help companies mitigate current risks and lay the foundation for a more successful supply chain once conditions return closer to normal, providing a significant competitive advantage.