If the past few years have taught manufacturers anything, it is that their supply chains are not nearly as resilient and agile as they once believed. The COVID-19 pandemic and conflicts across the world have disrupted supplies on an unseen level. COVID-19 and numerous other global conditions have weakened nearly every single link in the value chain. Luckily this whitepaper from PwC, the Manufacturing Institute, and the Manufacturing Leadership Council (MLC) details the steps that manufacturers can take to begin building more agility and resiliency into their supply chains. Here are a few of their recommendations:
Break Down Operational Silos
Barriers between functional areas and teams block collaboration across supply chains. Every single area involved in the supply chain needs to work together and have the ability to see what each team is working on. Collaboration and transparency are the keys to an agile supply chain. Run scenarios that force your teams to work together and learn how to solve a crisis
Begin Disruption Planning
As mentioned above, planning and preparing for inevitable disruptions is crucial. Use the following five questions to begin categorizing potential disruptions into levels of severity:
- What is the source(s) of the disruption?
- What will the disruption impact and for how long?
- Does the workforce have the right mix of talent, skills, and agility to adjust the supply chain?
- What is the most a company can produce with current inventory levels?
- What solutions will help work around the shortage of raw and refined materials?
- Which supply-chain games will need to be closed?
After answering these questions, begin planning for a wide variety of potential disruptions. Just in the past 3 years, we have had a global pandemic, and the largest conflict Europe has seen since WWII. All of this is to say, plan for every possible contingency.
Achieve End-to-End, Seamless Connectivity
Achieving this end-to-end connectivity and visibility can be costly. However, the time, effort, and monetary investment put into achieving this seamless supply chain will be worth it if the supply chain is adequately prepared for the next disaster.
Design a Network that Grows Stronger Through Agility
According to the MLC, 80% of manufacturers are placing a sharper focus on building more resilient and efficient supply chains. So much so that many manufacturers in the US are weighing the benefits of shifting their off-shore manufacturing operations to near- or onshore options. This shift would build resiliency by reducing response time and exposure to various forms of risk. While these shifts may be expensive, massive undertakings, stress-testing software allows manufacturers to discover new, more reliable manufacturing and shipping options.
Ask Yourself Tough Questions About your Supplier
The importance of supplier reliability and resilience has never been more clear. Here are a few questions companies should ask themselves about their suppliers:
- Does your supplier manage supply chain challenges well?
- Should you consider multiple suppliers for the same input?
- How vulnerable is the supplier to experiencing its supply-chain issues?
- Do you need to negotiate contracts and terms with your current suppliers?
- Does it make sense to engage a contract manufacturer to produce a component you can produce in-house?
Increase your Workforce’s Resilience
As manufacturers fold new technologies into their operations, your workforce must become more agile and ready to adopt these new tools. Manufacturers need to ramp up their training for both new and current employees. Make sure everyone knows how to do the high-value work that is required of them.
Simplify and Harmonize
Simplifying and harmonizing your supply chain will open up new opportunities, increase scale, and allow manufacturers to increase their capacity.
If you are trying to increase your supply chain’s agility, adopting Dynamics 365 Supply Chain and Manufacturing are a great first step. Contact our team to learn more.