Are You Ready for the Next-Generation Supply Chain?
Next-generation supply chain. Frictionless supply chain. Supply Chain 4.0.
The terms may vary, but they all describe the same concept: a supply chain that uses advanced technology to improve performance, increase customer satisfaction, and empower manufacturers to consistently deliver the perfect order. But what does it take to achieve a next-generation supply chain and how can manufacturers take the first steps to getting there?
The building blocks of a modern supply chain
First, let’s take a look at the advanced technologies driving the future of supply chains:
Internet of Things (IoT) sensors provide real-time data on everything from inventory levels to the condition of goods in transit. This helps you make informed decisions and quickly address potential problems.
Advanced robotics and automation can speed up processes and reduce human error. By using robots for routine tasks, you can free up your workforce for more strategic activities.
Big data analytics is essentially a powerful magnifying glass that can uncover hidden patterns and insights from massive amounts of data. By analyzing past sales and customer behavior, you can predict future demand and optimize your production schedules.
Artificial intelligence (AI) can use machine learning to find the best routes for transporting goods, predict disruptions, and automate decision-making processes. This helps your supply chain remain flexible and adaptable.
Challenges to adoption
According to one report, companies that implement a next-gen supply chain can see up to 23% higher profitability compared to those that stick with traditional methods. Yet only 36% of organizations have fully embraced this transformation. Why?
One of the biggest barriers is manufacturing labor shortages. An often-reported stat predicts the growing manufacturing skills gap will lead to 2.1 million unfilled jobs by 2030.
Increasing complexity is another major barrier. High volume and variability create inefficiencies that are hard to control. Mergers and acquisitions, and the siloed systems and processes they introduce, add even more complexity.
Manual processes also drag down efficiency but are surprisingly common. In many manufacturing facilities, workers manage 10 to 30 manual processes through tools like Excel.
Meanwhile, inaccurate demand forecasts and unexpected demand spikes can throw even the most well-planned operations off track, resulting in overproduction and costly stockouts.
Poor data quality also leads to inaccurate decision-making, inefficiencies, and increased costs throughout the supply chain.
Pinpoint pain points in your supply chain
Growing complexity, crippling constraints, inefficient processes, and inaccurate forecasts all create friction that impacts your KPIs. But how do you know where the friction is coming from? To identify areas in your supply chain that need the most help, consider the following questions:
Overall order cycle time
- How well are you balancing speed with accuracy in order processing and fulfillment?
- Are there specific stages where orders consistently slow down?
- What unforeseen factors often cause delays, and how are you addressing them?
Inventory turns
- Are you finding the right balance between having enough stock and avoiding excess inventory?
- What patterns do you observe in stockouts or overstocks, and what underlying issues contribute to them?
- How accurately are your demand forecasts, and what adjustments could improve precision?
On-time delivery and customer satisfaction
- What percentage of orders meet their promised delivery dates. Where do you see frequent deviations?
- Are there recurring challenges in your logistics or supplier network that impact delivery?
- How closely are customer satisfaction metrics tied to delivery and product quality? Where is the disconnect?
Production efficiency
- How adaptable is your production process to changes in demand or disruptions?
- Are legacy systems or manual processes consistently creating bottlenecks or inefficiencies?
- How effectively are you integrating new technologies or innovations to streamline production?
Need help?
Navigating supply chain complexities, rapidly evolving technology, and workforce shortages is no simple task. But you don’t have to solve them alone. Our 20+ year supply chain veterans empower manufacturers to optimize inventory, uncover patterns in shop floor data, and seamlessly adapt to disruptions.
Ready to take the next step?
MCA Connect’s Rapid Problem-Solving Workshop helps manufacturers solve specific business challenges in just a few weeks. Come with your most pressing issues. Leave with business value clarity and a practical action plan. After the workshop, we’ll help implement your improvement opportunities, so you get the results you want. Contact us today to get started.
