With disruptions to supply chain operations set to remain through 2023 and beyond, Stephen Hayes, Managing Director at automation and control technology specialist Beckhoff UK, looks at how manufacturers can increase the stability of their supply chain.
The impacts of supply chain disruption are becoming all too familiar – shortages, inflation, factory closures, goods waiting at ports to be unloaded, and so on.
These disruptions have a huge impact on a business, and not a good one. From shipping delays to complete stoppages of production, supply chain disruptions leave manufacturers with financial losses, customer dissatisfaction, reputational damage and increased costs.
Therefore, it is crucial that businesses gain a clear understanding of what a supply chain disruption is and how it can affect their operations before implementing the necessary measures to protect themselves against any uncertainties.
Some might say a diversified supply chain is simply a variety of supply and manufacturing channels to meet business needs, but it is much more than that – it is the heart of supply chain resilience.
Manufacturers should minimise risk and increase agility by developing a flexible risk management strategy that involves multiple suppliers, the reimagination of manufacturing and distribution networks, and the use of redundant and multimodal logistics methods.
In fact, well known food manufacturer Kellogg Co realigned its sourcing strategy and distribution network in the wake of packaging bottlenecks during the COVID-19 pandemic. As the region’s Korean supplier ran short due to shipping delays, Kellogg Co found an alternative supplier in New Zealand, which was based closer to home and reduced transportation costs.
Research from KPMG has revealed that over 50% of firms believe increased digitisation and automation will increase the resilience of their supply chains, with real-time tracking and monitoring systems able to offer insights into inventory levels, production progress and shipping statuses.
Tracking systems can provide data to help manufacturers improve supply chain management by showing inefficiencies and unnecessary expenses. Plus, tracking systems can also alert supply chain managers to any problems during the supply, production or delivery process, helping businesses to act quickly before product is damaged or wasted.
Returning to the aforementioned example, Kellogg Co uses software to review disparate sources of data relating to various demand signals. When it senses a disruption, or a pattern that might lead to a disruption, it provides a recommendation on how to avoid it. This helps the company to adjust and prevent an out-of-stock issue from occurring, days to weeks in advance.
Leveraging these software tools is crucial for proactively managing disruptions and building more resilient supply chains. That’s why software, such as Beckhoff’s PC-based control systems, plays a crucial role in ensuring scalability and modularity when quick adjustments in production and the integration of alternative suppliers are needed.
No matter the event or issue, supply chain stability can only be possible with software like this, coupled with the right operational changes. The past few years have shown us that disruptions in the supply chain are inevitable and costly, but like Kellogg Co, restructuring and automating processes can reshape companies faster than you might imagine.