While the pandemic was undoubtedly the catalyst for recent supply chain disruptions it’s not the only cause. Longstanding weaknesses in the supply chain like port infrastructure, outdated supply chain strategies and impacts of natural disaster and wars have all further affected global supply chains. These ongoing disruptions mean manufacturers and distributors must navigate challenges while rapidly addressing the needs of their people, customers, and suppliers.
The current business environment characterized by constant change, shorter product lifecycles and increased demand uncertainty mean organizations need control and agility within their supply chain to maintain competitive advantage. With reliable data from ERP manufacturers and distributors can use data analytics to respond to challenges.
Here’s how ERP can support your organization to gain the control you need in operations and processes to increase efficiency and overall customer experience:
1. Supply chain visibility to maintain competitive advantage
Manufacturers and distributors need to make sure the right goods and materials are in the right place at the right time, budgeted for appropriately, and replenished as needed. To do this, they need access to a real time picture to manage every aspect of the chain. New SYSPRO research reveals 47% of survey respondents invested in sensors, IoT or IIoT to collect data and respond to supply chain disruption, however only 20% of businesses invested in data analytics tools to process and analyze the data and only 5% of businesses investigated AI and ML to draw any long-term benefit from the data collection. Without the right data insights businesses are unable to understand the impact of all factors on their daily business activities and deal with supply and demand shocks.
An ERP solution that has the right planning tools and predictive analytics integrated throughout the business gives manufacturers and distributors a full picture for an effective response to the risks faced. This enables organizations with the control and competitive advantage, for example, to respond to supply chain issues like adjusting the prices as per the demand or expand the margins for a high demand product with a limited supply.
2. Collaboration for transparency and profitability
SYSPRO research further reveals that 60% of businesses are unable to engage with customers and suppliers in real-time. While customer engagement and external collaboration remains a pain point, only 44% of businesses have systems that allow them to effectively collaborate with external suppliers and customers. A contributing factor to ongoing supply chain disruptions is the traditional, linear supply chain model, where each step is dependent on the one before it. Inefficiencies at one stage result in a cascade of inefficiencies down the line. And when the customer and supplier are located at either end of the chain, it’s easy to see how collaboration breaks down, and end-to-end visibility is nearly impossible. The resulting reactive and uncoordinated response makes it challenging for procurement teams to know exactly which suppliers, customers, sites, parts and products are at risk. It is, therefore, extremely difficult to secure new sources of supply in a timely manner.
Data management and integration through a portal or portal dashboard enabled by an ERP system gives manufacturers and distributors the ability to engage, communicate and connect with colleagues, suppliers and customers while giving manufacturers the control and agility they need to deliver on changing needs and demands.
3. Digitalization to thrive into the future
Now more than ever manufacturers and distributors should be exploring digital solutions to adapt to supply chain changes. The 2021 SYSPRO CFO 4.0 Survey reveals that 51% of manufacturing CFOs plan to invest in machinery, robotics, and technology automation, and 61% believe that predictive models supported by meaningful measurement and reporting are needed to ensure the business remains competitive. Digital technologies make it possible for companies to transform how they operate. For manufacturers and distributors digital transformation means employing technologies like analytics, AI, robotics and IoT to collect, process and automate information, processes and drive operational excellence.
ERP is key to digital transformation but over and above that organizations need a clearly defined digital strategy that fits within their supply chain strategy. When embarking on a digital strategy it needs to be with trusted advisors and industry specialists who can guide you every step of the way and change management also needs to be implemented to ensure the digital transformation efforts deliver required results.