December 6, 2018

Can Supply Chain Companies Succeed in Uncertain Times

by Hans Thalbauer, SAP, Supply Chain Expert

Benjamin Franklin once wrote that death and taxes are the only two certainties in life. But there’s another item we should add to that list: uncertainty.

Things like elections, immigration and changes in trade policy profoundly impact the way companies conduct business. These issues affect marketplaces, supply, demand, shipping costs and more.

For manufacturers to remain profitable in the face of uncertainty, they need to better understand their supply chain and adapt as issues start altering their operations.

Here are three ways manufacturers can prevent uncertainty from becoming a nuisance:

1. Gain total supply chain visibility

Innovative technologies, like the Internet of Things (IoT) and digital twins, provide manufacturers with real-time insight into their products, processes and partners.

Total visibility helps organisations determine if a flawed product is behind lackluster sales or if poor economic conditions are to blame. It helps them identify shortcomings in planning and production and gives them insight into labour shortages that could complicate their operations.

With a complete picture of the supply chain, manufacturers can also simulate different scenarios and figure out the best way to handle the potential challenges.

For instance, if new tariffs are expected to increase the cost of raw materials from China, a business could proactively plan to source its materials from Mexico instead. This ensures the manufacturer remains as profitable as possible.

2. Increase customer collaboration

We’re living in an age of increasing customer-centricity. Manufacturers that fail to anticipate and fulfill their customers’ elevated expectations with high-quality personalised products delivered at breakneck speed – even within the hour – risk losing their competitive edge.

One way to achieve this is by developing smart products equipped with IoT-enabled sensors.

Smart products enable manufacturers to stay closely connected to their customers. They allow companies to see how buyers interact with their goods, which enables them to collaborate with consumers.

By placing IoT sensors in its running shoes, for example, a manufacturer can track an athlete’s speed, distance and cadence. Best of all, it can assess the workout and recommend the perfect pair of personalized sneakers through a mobile app. This won’t only improve the athletic performance – it’ll improve the customer experience, too.

3. Embrace distributed manufacturing

Distributed manufacturing is all about localisation. It involves working with a variety of partners around the globe to produce products precisely where they’re most in demand.

If the market for VR headsets starts heating up in Paris or the demand for parkas begins growing in Oslo, manufacturers could produce those items in those specific cities.

3D printing is one method that makes distributed manufacturing possible. Today, companies can leverage the technology to create products wherever they’re needed – including at the site of delivery.

Say new-home development starts booming in Tokyo. Instead of a construction company ordering the nails, lumber, and plaster normally required to build the walls of a house, a 3D printer could produce the fully assembled walls. This eliminates shipping costs and delivery times and increases efficiency.

Solve your uncertainty issues with confidence

Circumstances can change in an instant. And it’s impossible to predict what future events will impact your company and how. That’s why flexibility is key.

Innovative technology empowers manufacturers to stay agile in the face of constant change and uncertainty. And in today’s ever-evolving world, staying agile means staying successful.

Discover how SAP Business One can help you address changes in the supply chain and help you to effectively manage uncertainty!

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