Supply chain resilience is in the spotlight. Not only in Australia and New Zealand but around the world, the COVID-19 pandemic has thrown supply chains into disarray.
As more and more manufacturers source from suppliers overseas or sell in a global marketplace, supply chain resilience has never been more mission-critical.
Unexpected disruptions can come from anywhere. But by building a robust, resilient supply chain, any manufacturer, cabinetmaker or warehouse can avoid losses and weather the storm.
Strategies you can use to improve supply chain resilience and efficiency
Understand your business end-to-end
First things first: you need to know your business. That doesn’t just mean understanding what you produce, but also:
- Where raw materials originate
- Supply timelines and transport routes
- What materials can be substituted
- Inventory that is taking up space
- Which products or services have the highest (and lowest) profit margin
- The materials you use regularly
Once you know which materials and suppliers you rely on, you can build a risk profile for your business. Implementing a specialised ERP is the most efficient way to understand your operation in real-time.
Border closures hit Australia’s manufacturing sector hard. All of a sudden, global air cargo capacity shrank by 24.6%. Raw material coming from overseas or interstate became more difficult to source, with delays flowing down the production pipeline.
Putting all your eggs in one basket (i.e. relying on a single supplier for parts or material) is a business risk. So is storing inventory in one location, focusing all your production capacity on a single product or selling into a single market.
This leads us to…
Diversify your strategy
A diverse supply chain is a resilient supply chain. There are two key ways to divide and conquer:
1. Source from multiple suppliers
Partnering with diverse suppliers is a safeguard to avoid disruption. Seek out suppliers who can meet your needs and invest in building a relationship over time.
2. Build flexibility into your operating model
If 2020 and 2021 taught us anything, it’s that flexibility pays off. Strategies like spreading inventory between storage locations and rapidly pivoting to new products, services, or solutions ensure your business is resilient in the face of disruption.
While it might be tempting to integrate redundancies into the supply chain, the resulting cost and clutter are unsustainable.
Instead of redundancies (like extra inventory, safety stock or additional workers), look for opportunities to pivot, redirect and optimise in line with Lean and Six Sigma principles.
Use technology and data to scale
As your business grows, operations can quickly become chaotic. Using an ERP to centralise and streamline end-to-end data means management can:
- Analyse supplier costs and performance
- Streamline order procedures
- Build relationships with key suppliers
- Cut operational waste
- Invest in growth
- Identify continuous improvement targets
In short, an ERP leads to more informed business decisions.
The best manufacturing ERP for resilient supply chains
Jobman is an end-to-end ERP for manufacturing, cabinetmaking and joinery businesses. With the tools you need to scale your business, plus real-time operational insights, accurate data, and total business transparency, Jobman is the first step to a resilient supply chain.