Manufacturer profitability and dynamic competitiveness rely on an optimized supply chain.
Product manufacturers must oversee and optimize their supply chains to ensure they are adequately able to meet customer demand with quality items at economical prices.
The supply chain lies at the heart of your manufacturing business, and it is often a set of interconnected processes performed by different departments (and companies) that work together to manufacture and deliver products to customers and end users.
Managing this network is no small feat. A breakdown at any stage can be catastrophic for your business.
To improve the supply chain management of your manufacturing business, follow these five best practices below:
Demand Forecasting
Demand forecasting is essential for manufacturing supply chain management because it involves predicting future demand, allowing businesses to optimize production accordingly.
Aligning supply with demand will prevent over- or under-stocking, improving your overall supply chain performance.
Accurate forecasting also helps teams to allocate resources, such as machinery and labor, efficiently to meet demand.
Inventory Optimization
Inventory optimization is at the core of supply chain management.
It is one of the first steps to ensure optimal production rates, reduced operational costs, and successful risk mitigation.
It is defined as the process of managing inventory levels to meet forecasted demand while keeping associated costs as low as feasibly possible.
To successfully optimize the inventory of a manufacturing operation, leaders must balance the costs of carrying stock and materials against the costs of lost sales.
Utilize artificial intelligence to target and achieve the inventory level needed to satisfy current and future forecasted order figures.
Outsourcing
Outsourcing in manufacturing supply chain management offers several benefits, including cost reduction, increased flexibility, and access to specialized expertise.
Before you can outsource, thorough due diligence is required.
Visit www.ryder.com/en-us/insights for guidance on how to outsource various elements of your manufacturing supply chain effectively.
It is an excellent source of information from a leader in commercial transportation and supply chain management solutions, curated for companies wanting to learn more about topical news, industry trends, and best practices.
Supplier Relationship Management
Effective supplier relationship management (SRM) in the supply chain is essential for fostering strong partnerships, clear communication, and mutual benefit.
Establishing defined expectations is critical to foster trust in supplier relationships.
Frequently assess supplier performance to monitor risks and encourage collaborative efforts to achieve shared goals. The backbone of any supplier relationship is mutual success – which all but guarantees transparency and increased productivity from both parties.
Leverage technology to streamline processes and improve efficiency.
Risk Management
Identifying and mitigating potential supply chain disruptions is essential.
Natural disasters, geopolitical disturbances, and supplier issues can all negatively impact your organization’s supply chain.
Before 2020, the supply chain was an afterthought for many owners of small and mid-size businesses. Owners and managers knew their key suppliers and possibly monitored purchasing costs or occasionally helped to resolve minor disruptions – until the pandemic hit.
Everything changed when widespread shortages and delays became the norm for many businesses on a global scale. That catapulted supply chain risk management practices to the forefront, where they should have been from the start.
To End
Follow these five best practices above and, lastly, prioritize supply chain agility to adapt to disruptions and ensure business continuity.
