One of the biggest lessons for manufacturers emerging from the impact of a pandemic has been supply chain disruption and how to respond to it. Relying solely on a single source for important components of one’s products leads to production cessation, loss of sales, and layoffs. Having alternative suppliers is key, and certainly having vendors closer to home is helpful. As a result, more manufacturers are shortening their supply chains and investigating other suppliers. Many have relied on Chinese manufacturers for the best prices which they passed on to the consumer. Rising costs of production and growing inflation are leading us to a time of higher prices for everything we consume.
So, the question becomes, how does one remain profitable when the entire process becomes more expensive and cumbersome? The answer is not always obvious and that is why you may want to turn the task of uncovering that answer over to a logistics expert.
The key to mitigating risk now and in the future is having an open line of communication with the supplier. Do they let you know when machines are down, and delays are imminent? Do they fulfill purchase orders within the lead time? Is quality consistent?
Your business should have an employee assigned to communicate with supplies to know what issues are incoming and how industry changes impact the supplier. Will an economic or political issue hinder production and impact travel time? Good communication with the supplier should give your business time to prepare for changes and come up with plans to respond to them.
Digital Supply Chains
Connectivity to suppliers through digital means can tie them to your production software for complete control and visibility into the supplier’s end of the workflow. Tools that provide insight into blind spots of the business give other departments information they need to react. And if suppliers speak another language, the software at their disposal will communicate in terms they understand to integrate all ends of the business operation together symbiotically.
The Labor Challenge
Complying with health regulations posed another set of challenges. Many production floors were pared down to minimum staff with alternating workdays to enforce social distancing regulations. Schedule disruption slowed product production and demanded alternative ways to conduct meetings and work remotely. Consequently, new technologies were favored, such as SaaS software and online conferencing platforms. In the long run, many of these technologies will continue to be used wisely as businesses have discovered they save money in travel, meeting rooms, and make it easier to gather many people with conflicting schedules.
Unfortunately, for many, workers unwilling to show up for jobs for health reasons or because they are earning more from the government by staying at home are susceptible to replacement by machines who can provide continuous production activity.
We are looking at a change in how entire businesses operate, from software to training to automation, in preparation for the next health crisis. No business that faced difficulties wants to be caught off guard again.