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The Demands Driving Supply Chain Innovation in Discrete Manufacturing

The Demands Driving Supply Chain Innovation in Discrete Manufacturing


Sep 12, 2017
Manufacturing and Distribution

Driving Supply Chain Innovation 

No one argues that today’s manufacturing environment is changing, and changing fast. As customers are demanding more from suppliers in order to satisfy their own customers, innovation is progressing at lightning-fast speed to address the issues these demands present. 

Omni-channel retailers—and more broadly, Amazon—have taught customers to expect a level of service unheard of just 15 years ago. Today, customers want things when they want it, how they want it, and where they want it, at the lowest possible cost. For manufacturers that means not only on-time and in-full deliveries, but reduced lead times, a range of customization opportunities, visibility into orders, and more. The bottom line is discrete manufacturers have to find ways to expedite more complex orders, faster, and more accurately. To do that, they must be able to quickly adjust their processes and capabilities to respond to evolving customer needs and market pressures. 

While traditional methods of managing supply chains aren’t designed or equipped to keep up with the pace of these demands, discrete manufacturers can satisfy them with technologies that allow their organizations to be more agile. Agility in manufacturing is generally defined as the ease and speed with which a company can redesign and realign their processes to respond to today’s needs and threats; it’s sometimes referred to as operational agility. Just as important, though, is the ability to quickly and accurately sense opportunities in the market and respond to them quickly. 

The Solution? An ERP System
Discrete manufacturers employing robust enterprise resource planning (ERP) solutions are far more able to deliver on customers’ expectations because these systems provide functional areas throughout the organization with real-time visibility into every facet of the supply chain, from raw materials suppliers straight through to fulfillment and delivery. With access to more (and more types) of data, organizations are more able to control their processes and gain insights needed to make the decisions that lead to greater efficiencies. Here are some other ways an ERP solution builds agility into an organization:  

  • Control is centralized and data entered (and viewed) is visible to all departments, creating “one set of the truth” that everyone works from and minimizing the risk of costly errors. 
  • Integrating processes and information across functional areas improves speed of execution and enhances the ability to reconfigure processes to respond to changes. It also allows you to collaborate more closely internally as well as with suppliers and other partners you rely on to get your product made and shipped, on-time and in full.
  • The data collected also informs you about the quality of the product you’re making, the profitability of each customer, the problems each customer reports (and how customer service handled them), the productivity of each connected piece of equipment, and many others. This information can be used to mitigate problems and enhance agility.
  • Sometimes speed alone makes an organization more agile. Because an ERP solution puts the right information in front of the right people at the right time, events can be triggered more quickly. While the actual process that’s triggered may not change, actions are initiated sooner and completed in a shorter timeframe. 

An efficient company is one that’s leveraging company-wide visibility to get more done with the same resources (or with fewer), optimize its processes, and minimize bottlenecks that stand in the way of a fast, accurate order-to-cash cycle. Yet according to the Geodis 2017 Supply Chain Worldwide Survey, 77 percent of manufacturing firms reported that they had “no visibility or a restricted view” of their supply chains; only 6 percent said they had “complete visibility.” 

As the market becomes more complex and customers’ demands soar, visibility is without a doubt one of the most powerful tools a discrete manufacturer has at its disposal. Take advantage of the depth of manufacturing expertise the Wipfli team has. Reach out to talk about putting an ERP solution to work for your company

Author(s)

Suzanne Koss
Suzanne Koss, CPIM
Partner
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