It seems like almost every day we’re hearing about the litany of problems impacting the global supply chain.
From a trucker shortage that is slowing down shipments to higher material prices that put the entire supply chain in a headlock, the news has not been overly positive. Combined with spiking gas prices and inflation making finished products more expensive and harder to come by, there’s valid reason for concern. However, despite COVID-19 wreaking havoc on the overall supply chain, there have been opportunities for long-term growth sprinkled in, starting with technology.
The pandemic has spurred companies to look at technology in new and exciting ways, especially as manufacturers face an uphill battle to fill empty jobs. According to The Manufacturing Institute, there will be an estimated 4 million manufacturing jobs that need to be filled between 2020 and 2030 and most projections have the industry falling well short of those numbers.
But innovation isn’t tied to certain industries, either. In a survey conducted by MHI and Deloitte, nearly nine in 10 companies cited the pandemic as a factor impacting overall supply chain importance. Close to six in 10 went one step further, saying disruptions and shortages were their biggest challenges to success.
Supply chain technology is constantly evolving, leading companies to embrace emerging methods and advanced technology that supercharges management systems, automates redundant manual tasks, and improves customer experiences.
It’s true the pandemic completely changed how the supply chain works, but no one can act surprised. In all honesty, these changes have been in motion for years.
The early months of the pandemic came with lockdowns, shutdowns, and delays as workers stayed home and demands shifted. As the weeks wore on and regulations were loosened, demand began outpacing supply as manufacturers grappled with delays while trying to ramp up operations. The result left ports backed up with both raw materials and final products that couldn’t get into the hands of increasingly impatient companies and customers.
A flurry of factors has combined to impact how quickly and reliably the materials manufacturers and end users need, but the pandemic has undoubtedly forced supply chain leaders to rethink how the process works. This means more emphasis on speed, reliability, and efficiency, while limiting problems caused by current variables like labor, lead times, and costs.
What began in earnest with small-scale artificial intelligence (AI) improvements to streamline supply chain planning has blossomed into a technological revolution. Automated material handling is reducing manufacturer and distributor reliance on human stock pickers. Cloud computing gives companies better insight into supply chain visibility, allowing them to better plan for future stocking and shipping issues.
Machine learning has the potential to streamline supply chain management by improving enterprise resource planning solutions. ERPs are critical because they allow companies to integrate departments across the company using one system. The result is a more complete view into the company’s business data using a singular system.
Meanwhile, remote technology has taken hard-to-fill local jobs and opened them up to the world. For example, some companies have begun hiring remote forklift drivers, who can handle their duties in the distribution center from thousands of miles away.
There’s an obvious need for better visibility across the board, but how do manufacturers, distributors, and end users get on the same page?
Advanced analytics help companies establish better supply chain visibility, allowing them to quickly know in real-time what’s in stock, anticipate when certain products may become more popular, and determine if there are any delays that could leave the customer hanging. Better data can translate into customers getting exactly what they ordered on time, leading to better customer experiences.
One of the biggest problems we’ve seen over the past two years is an uneven supply and demand balance. Whether it’s baby formula, cleaning supplies, microchips, or copper wire, it’s getting tougher to get your hands on what you need, when you need it.
Machine learning uses data supplied from a variety of sources to quickly create models and forecasts for planning purposes. As a result, there are fewer human errors, companies can maximize the products they have in stock, reduce stock-on-hand, and make better use of “just in time” products or services. Companies experience less waste, fewer unexpected costs, and can focus on production that means specific needs.
Better data also allows for more experimentation and innovation well outside of the supply chain. Depending on the situation, access to more robust data points can make product design move more quickly, find streamlining opportunities in the shipping and manufacturing processes, and open pathways to scale.
In the face of rising costs and a wide-open job market, cutting costs and doing more with less may help find efficiencies in the market and prevent manufacturers and distributors from passing on unintended costs to their customers.
When companies become more intentional about the products or services they’re producing, warehousing, and shipping, they can lean into better relationships with their partners. Better collaboration internally makes it easier to collaborate with external partners in the industry.
Supply chains are rapidly adapting to meet new conditions but the way we approach modern technology in the manufacturing space is going to eventually determine overall success.
Unfortunately, labor shortages in the manufacturing industry are not going to go away any time soon and may become worse before they get better. In the meantime, the supply chain is beginning to improve as bottlenecks at domestic ports and with large trading countries start to return to pre-2020 levels, though the ongoing COVID-19 outbreak in China has created a new set of issues to navigate. By most measures, experts agree we’re still about a year away from returning to a somewhat normal supply chain.
Technology is doing its best to shorten the timeline and get products back on the shelves and into the hands of distributors and end users. Some industries have wholeheartedly embraced new tech in their buildings, but historically tech-adverse companies have been slower to the draw.
Now is the perfect time for manufacturers across the United States to take advantage of an industry supply chain reset and put forces in place that reduce costs, increase collaboration, and drive profits.