7 digital solutions that keep your manufacturing company robust when your supply chain breaks

Imagine you are a toy manufacturer who suddenly has difficulty sourcing the plastic for your best-selling toy shortly before the Christmas sales. Miraculously, you manage to obtain the necessary raw materials. But if you are to have a chance at the Christmas sales, production has to be rushed.

You take the chance. To save Christmas. Unfortunately, it turns out that the rush-produced toy does not live up to the safety standards.

And now you are in an even worse situation. Because you had not protected your manufacturing company against problems in your supply chain. Fortunately you can do something about that, if you optimise the processes in your supply chain with digital solutions.

Before we can get to the 7 digital solutions that can help you steer your company clear of the big supply chain icebergs, we first have to look at the problems and consequences an unstable supply chain can create for you.

And we also have to dive into the individual key processes you already have in your supply chain as a manufacturing company.

Let us get started!

3 problems you can get when your supply chain is limping:

1. Disruptions in your production flow:

   The production flow is the first thing to be hit when deliveries of raw materials or components fail to arrive or are delayed. It is not only about the immediate production stop. It can also disrupt planning and lead to costly restructuring of production lines.

2. Higher costs:

   A stuttering supply chain can lead to rush orders, extra freight costs, and in the worst case, the need to find alternative (and often more expensive) suppliers. That kind of unforeseen expense can quickly accumulate and erode your company’s profit margins. For example, a company that depends on special components from abroad may find itself forced to use significantly more expensive air freight instead of sea freight.

3. Lower quality control and a weakened brand:

   Delays can push your company to rush production in order to catch up, which can come at the expense of quality. That can of course damage the company’s reputation and lead to dissatisfied customers. Just think of the toy manufacturer above.

Once you have been hit by a weakened supply chain, it can have profound and long-term consequences for your company.

For example:

• Financial losses:
  The costs of rush orders, penalties for late deliveries, and lost sales directly affect the company’s bottom line.
• Weakened customer relationships:
  Constant delays or quality problems can lead to the loss of customers, who instead choose a more stable competitor.
• Declining employee morale:
  Constant disruptions can create a stressful working environment and lead to more long-term sick leave and resignations.
• **Damage to your company’s reputation:
  **Long-term delivery problems or quality problems can damage your company’s reputation, which can be difficult and time-consuming to rebuild.

What can you do to protect yourself against an unstable supply chain?

Here are 4 suggestions for what you can do to safeguard your company:

1. Get a robust supply chain strategy:
   Diversification of suppliers, investment in technology to predict and respond to supply problems, and building strong relationships with key suppliers.
2. Agile production planning:
   Be ready to switch production quickly based on changes in the availability of raw materials and components.
3. Solid inventory management:
   Make sure to have a strategic buffer stock of critical materials. That can help reduce the effect of supply disruptions.
4. Clear communication:
   Create clear communication with customers, suppliers and employees about supply problems and expected delays in order to minimise misunderstandings and maintain trust.

So it takes adaptability, a good strategy and timely care if you are to navigate your company safely through unforeseen problems in your supply chain.

And in that way you can gain some good competitive advantages over your competitors.

Let us now take a closer look at the processes in your supply chain.

What does a supply chain actually look like in a manufacturing company?

As you probably know (and can read above), the supply chain processes in your manufacturing company are critical for efficient and economical production. So to give you a greater understanding of the processes, here is an overview of the key processes that make up a supply chain in a manufacturing company.

All the way from the purchase of raw materials to the final product landing with the customer:

1. Planning

• Forecasting: Use historical data and market analyses to predict future demand for their products.
• Production planning: Draw up a production plan based on the forecasts, including volumes, schedules and resource requirements.

2. Purchasing

• Supplier selection: Identify and choose suppliers who can deliver the necessary raw materials and components at the right time and price.
• Purchase orders: Issue purchase orders to suppliers based on the production planning.
• Receipt and inspection: Check the materials for quality and quantity when they arrive, before they enter stock.

3. Inventory management

• Stock handling: Efficient management of stock ensures that sufficient, but not excessive, raw materials and components are available.
• Inventory costs: Minimise inventory costs, which include the costs of storage, insurance and obsolescence.

4. Production

• Scheduling: Implement the production planning by allocating resources such as labour, machines and materials to specific tasks.
• Production process: Transform the raw materials into finished products through a series of production processes, which can include assembly, machining, inspection and packing.
• Quality control: During and after production, quality control ensures that the products meet the established standards and specifications.

5. Distribution

• Stock handling of finished products: The finished products are stored safely until they are ready for shipping.
• Order handling: Customer orders are received and processed.
• Transport management: The products are distributed to the customers. Efficient route planning and load optimisation are crucial for minimising delivery times and costs.

6. Customer service

• Customer support: Answer customers’ questions and help resolve any problems.
• Returns handling: Efficient handling of returns and warranty claims is important for maintaining customer satisfaction and loyalty.

7. Feedback

• Data collection: Data is collected from each step in the supply chain process in order to identify opportunities for improvement.
• Implementing improvements: Implement the improvements in order to optimise the processes and reduce costs.

Fortunately you no longer have to handle all the processes manually and analogue. That would give a fairly large margin of error and be very resource-intensive.

So here are 7 digital solutions that can strengthen your supply chain. Every day.

Here is how you can handle the 7 processes in your supply chain digitally:

1. Planning

• Advanced data analytics and machine learning: Algorithms can analyse large volumes of data, including market data, social media trends and weather patterns, in order to make more accurate forecasts about demand.
• Digital planning tools: An ERP solution, such as 365 Business Central, helps with real-time planning and resource allocation, which increases flexibility and reduces waste.

2. Purchasing

• E-procurement systems: An e-procurement system digitalises the purchasing process, making it possible to automate purchase orders, track deliveries and analyse supplier performance.
• Integration with suppliers: Digital platforms can be integrated directly with suppliers’ systems in order to ensure real-time monitoring and communication, which improves visibility and collaboration throughout the supply chain – read about 365 Business Central V2 API

3. Inventory management

• Automated inventory management systems: Systems such as WMS (Warehouse Management System) automate many aspects of inventory management, including stock replenishment, picking and packing.
• Robotics and automation: Robots and automated systems, such as AGVs, can handle materials, which reduces human error and increases efficiency.

4. Production

• Smart manufacturing: Integrating IoT devices and AI into production equipment makes it possible to monitor and optimise the production process in real time.
• Digital twins: A digital twin is a virtual copy of a physical unit that can be used to simulate, predict and optimise performance without disrupting actual production.

5. Distribution

• Transport management systems (TMS): These systems optimise route planning, loading and shipping, which reduces delivery times and costs.
• Track and trace: IoT devices and RFID tags provide full visibility of the products’ location and condition during transport.

6. Customer service

• Digital service platforms: Online support portals, AI-driven chatbots, and CRM systems provide efficient and personalised customer service.
• Feedback and data analytics: Digital tools can collect and analyse feedback from customers, which helps the company improve its products and services.

7. Feedback

• Big data and analytics: Collecting and analysing data from the entire supply chain can uncover inefficiencies and opportunities for improvement.
• Integrated platforms: ERP, and other integrated systems provide an overall insight into the company and help in making data-driven decisions.

As you can read, there are digital solutions that can help you all the way through your supply chain processes.

That way your company stands strong when something unexpected suddenly happens in the global market, and your important deliveries are heavily delayed or do not turn up at all.

Read on about

👉🏼 What is 365 Business Central

👉🏼 How does a manufacturing company use 365 Business Central?

👉🏼 Safe and efficient Supply Chain with Trimit