Is Your Manufacturing Supply Chain Strategy Up to Snuff?

Manufacturers can gain more visibility into their supply chain by overcoming technological and cultural hurdles, according to an Industry Week column.

In the piece, Cyndi Fulk Lago, a vice president and leader of the supply chain technology practice at consulting and outsourcing firm Capgemini, and Anish Verma, a principal in Capgemini’s automotive practice, write that supply chain executives must lead changes in processes, technology and culture.

“Business processes need to become more integrated across business functions and across their supply chain network,” they write. “Seamless workflow of information and, more important, up and down stream supply chain decisions is a foundational step toward transparency.”

Technological advances can increase visibility, too. Specifically cloud-based platforms, mobile technology and predictive analytics make massive amounts of useful data available to manufacturers in real-time.

But in addition to investing in new technologies, manufacturers must also implement a cultural shift — “both within manufacturers’ walls and across their supply networks.” This includes eliminating data silos through collaborations across departments and with suppliers.

Meanwhile, only 10 percent of small and midsized manufacturers have a fully implemented strategy to optimize their supply chain performance, according to a survey of 120 of these businesses, conducted by Grant Thornton LLP for the National Association of Manufacturers.

The manufacturers remain optimistic about their business’ outlook, with more than 80 percent saying they were very or somewhat positive. But they say their supply chains show room for improvement. Thirty-six percent said they had only informal supply chain processes and little measurement of integrated tactical plans.

Respondents said they focused most of their supply chain efforts — and received the most benefits from— the following: building closer relationships with a few key suppliers, centralizing procurement for improved supplier terms and compliance, and nearshoring suppliers for lower transportation costs and other benefits.

“At the end of the day, it all hinges on staying competitive globally,” said Chad Moutray, chief economist for the National Association of Manufacturers, in a blog post about the survey. “That’s why I think so many manufacturers are focused on the supply chain, because it offers ways to increase quality and efficiency while lowering costs.”