You might hear the phrase “supply chain management” tossed around at work and write it off as a meaningless buzz term. However, the process has monumental impacts on a company’s profitability and efficiency, especially in the manufacturing industry.
Below, we’ll examine what the process is, how it works, and how you can master it.
The supply chain is the link between the manufacturers of raw materials, the company that uses those materials to build goods and services, and the consumers who receive those goods. When one part of the chain breaks, it has dramatic impacts down the line.
If the manufacturers can’t build the materials, the companies won’t have the tools needed to provide their goods, and the consumers won’t get what they need or be able to support the company. Unfortunately, the supply chain has several factors within those links that can each face roadblocks.
For example, there are distributors on the manufacturer and company sides. The manufacturer’s distributors need to deliver the materials to the company, and the company’s distributors need to deliver goods to the consumers. However, uncontrollable elements like broken transportation, natural disasters, and sickness like the ongoing COVID-19 pandemic can keep distributors from traveling.
Even minor effects can have massive impacts on business flow. For example, miscommunication between bosses and employees can keep companies from dedicating time and resources to essential projects, resulting in missed deadlines and profits.
Most chain management faux pas happen on the manufacturing side and are too subtle for unprepared managers to catch. Of course, communication is the most significant issue, as not having reliable discussion channels or issuing confusing instructions will bring production to a grinding halt. Even factors like company-wide disorganization and worn-down machines shatter the supply chain.
Understanding and properly managing the chain is essential for every business, but it’s most important within the manufacturing industry. Unfortunately, this is where most disruptions happen. In fact, at the height of the COVID-19 pandemic in 2020, nearly one-quarter of manufacturers across all sectors reported disruptions in their supply.
One of the most significant factors that create a problem is clear: supply chain management in the manufacturing industry is more complex than it is anywhere else. There are plenty of reasons for this, but the biggest is that manufacturing is more challenging now than ever before.
Consumers want more from their products as technology evolves, which places a heavy burden on the suppliers and an even heavier burden on manufacturers. In addition, companies must design products with advanced technology and complex designs, meaning even the slightest manufacturing mistake will have a massive impact.
Additionally, because these products are so evolved and need to be perfect, there’s a greater demand for regular communication, creating a roadblock. Since products are so technologically advanced, manufacturers need to use equally advanced equipment to make them. Of course, this presents a steep learning curve and demand for employees who operate the machines.
The increased need for precision, communication, and equipment training has detrimental consequences on companies not adept at supply chain management. They all need time to bridge those gaps, and breakdowns in communication, machinery or small assembly failures can add even more time.
It’s essential now more than ever to stay on top of supply chain management in the manufacturing industry. If you can conquer it, the positive impacts on the efficiency and profitability of your company and your customers’ satisfaction will become obvious.
Supply chain management is a broad term that encompasses several things that go into the process, including logistics management, time management, communication management, and countless others. If you can master all the elements that make up the supply chain, your workflow will improve in these fundamental ways:
Manufacturing is challenging even when things run smoothly with how much time goes into production, meetings, managing inventory, and other everyday responsibilities. Professional management ensures you have time for all those daily tasks by limiting time lost in needless ways.
Management experts will streamline your company’s communication channels to ensure everyone that needs to hear your messages is on the same page. Additionally, a professional team will schedule and track your input so that everything arrives when you expect it. So, you can hit the ground running every day, rather than fumbling through poorly run communication channels or waiting all day for a shipment that won’t arrive on time.
Nearly 80% of companies with a professional chain manager exceed their expected performance and revenue levels. That’s because proper business operations demand planning from a dedicated expert who can study the most effective ways for your company to save money.
Many supply chain management teams help companies by bringing in energy-efficient machines that demand less fuel and power and carefully planning employee schedules and operation hours for minimal downtime. Some even specialize in delivering items on time to cut shipping and holding costs.
When you minimize interruptions and manufacture more products at a higher level, your customers will benefit nearly as much as you. Your smooth operation helps the entire process, providing better profits and products for everyone involved.
The future of supply chains in manufacturing won’t get any easier in the future. That’s why it’s essential to have a management team you can trust to help your business operate at peak performance, and there is no better team for the job than Doherty Associates Inc.
We serve manufacturers in various sectors with specialized supply chain management. Our team knows what it takes to decrease downtime, remove unnecessary interruptions, and increase profits; bring our unique expertise into your business today.
Call now at (713) 829-4484 to learn more about how we can help your company succeed through expert supply chain management.