Overcoming Challenges to Becoming a Supply Chain Leader

Complex manufacturing environments can be difficult to navigate. Pressures unique to each industry, constant fluctuations in demand, and disruption on an unprecedented scale make these settings even more challenging.  Over time, these issues can take their toll on supply chain management. 

Most manufacturing functional areas are, by mission, tasked with managing issues that are only internal to the operation. Supply chain challenges are significantly more problematic for managers because they comprise both internal and external challenges. Becoming an effective supply chain leader means finding ways to overcome these obstacles.

Common Supply Chain Challenges

While the list is extensive, let’s tackle some of the most common and critical challenges supply chain leaders face:

Inadequate Supplier Communication

Poor supplier communication results from a supply chain with little automation and visibility. Relying on phone calls, legacy agreements, and other arcane practices makes it easy for problems to slip through unnoticed. These might include quality concerns or an over- or undersupply of a critical component.

But in the age of strict regulation and compliance, such as in the food and beverage and automotive industries, a lack of clear communication with key suppliers can spell disaster.

Inability to Demand Forecast

The same lack of visibility can cause the bullwhip effect and worse. Relying on old or manual data can make demand forecasting imprecise, and companies risk over-investing in raw materials or missing out on a critical cycle of new business.

Ineffective Scheduling and Planning

The inability to correctly forecast demand leads to plans that are not achievable and scheduling that is off, often by a great deal. Ineffective scheduling and planning negatively impact the plant floor as schedules, capacity planning, and labor planning become unreliable.

Inventory Discrepancies

Everyone has seen the dark side of inventory discrepancies. Shortages due to the challenges above, overstocking for the same reasons, or simple errors in tracking, FIFO, or expiry control keep pushing the problems forward cumulatively to manufacturing, where service levels suffer.

Identifying the Culprit

While structural and organizational deficiencies can contribute to or worsen these problems, they are predominantly the result of outdated, manual, or partially automated data and systems. Manual processes for data analysis are notoriously unreliable and subject to error, omission, and bias.

Partially automated systems are often subject to siloed data and plagued by interoperability issues from standalone legacy software. Many companies still have legacy systems and manual data analysis, which limits supply chain planning’s effectiveness and guarantees errors and challenges such as those above.

Data-Driven Smart Manufacturing

To hit aspirational KPIs, supply chain leaders are forced to change their mindset. Getting ahead of the competition means zeroing in on manual data, processes, siloed departments, and legacy systems to work under a single version of the truth.

Innovative software like that in the Plex Smart Manufacturing Platform provides analytics and capabilities that address each of these challenges with a single solution.

1. Smart manufacturing provides a platform for unifying supplier communication to      monitor their performance down to the factory floor. Demand signals can be pushed to suppliers electronically to adjust orders up or down. Quality and expiry issues can be spotted faster before they make a significant impact.
2. By automating processes and implementing advanced demand and supply software,   companies have a wide range of tools to focus demand forecasting and planning more sharply. The ability to detect and respond agilely to demand reduces inventory discrepancies and allows for more attainable schedules, increasing efficiency and positively impacting cash flow. And advanced “what-if” contingency tools help managers make better decisions faster when disruption occurs.
3. Because the demand plan is accurate, scheduling and planning can drill down into more precise capacity planning for machinery and labor. This eliminates waste and downtime, increasing efficiency.
4. With automated transactions, inventory ties directly into the end-to-end visibility to eliminate discrepancies and improve accuracy and performance. This reduces holding costs, eliminates the need for dead stock or expediting, and allows inventory control to contribute to compliance and regulatory control.

The New Supply Chain Reality

A strong supply chain leader embraces the right technology to drive change. This technology should enable a manufacturer to move away from manual data, deploy advanced analytical tools, and build accurate end-to-end visibility for the entire supply chain.

Read this related article for additional information on the challenges of complex manufacturing systems and how data-driven smart manufacturing technology can overcome them.