The largest recent supply chain interruption was caused by the Covid-19 epidemic. As suppliers and customers were facing challenging business conditions, they adapted to meet fluctuating demand; highlighting the importance of a resilient supply chain in the process.
According to McKinsey, a disruption can cost an organization 45% of one year’s profits over the course of a decade. Therefore, manufacturers and distributors who create supply chains that are resilient and can sustain disruption will not only survive but also succeed in this environment.
A Resilient Supply Chain Starts with Technology
Modern digital technologies currently exist to address the problems with the supply chain. In order to fully account for every factor that influences your operations, the best supply chain management solutions make every link in your chain totally transparent in real time. Industry 4.0 technologies such as cloud computing, the Internet of Things, and artificial intelligence (AI) serve as the foundation for these solutions. Advanced technology can help you keep up with your suppliers' technology while staying one step ahead of your competitors by automating essential functionality, whilst collecting and analysing large volumes of data.
A Connected Company Utilise Cloud ERP Enhances Resilience
A connected organisation is one that has completely integrated information systems that are created to offer the correct person the relevant information at the right time in a report or dashboard that is simple to understand. This makes it possible for you and your team to diagnose and fix supply chain issues quickly and accurately, regardless of where you are—on the job, travelling, or working from home.
When you put enterprise resource planning (ERP) on the cloud, this dynamic feature is available. Your ERP system unifies all facets of your company into a single, centralised location, ensuring that all data—from suppliers to clients to sales—is integrated. Cloud ERP is the quickest and most adaptable way for corporate teams to collaborate in the global digital economy. By enabling them to anticipate disturbances and react to them quicker than their on-premise rivals, it aids in their development of resilience. A point that was particularly clear during the pandemic.
The Benefits of Supply Chain Resilience for Business
Businesses have to deal with the pandemic while also fending off challenges from regular day life. Only 8% of companies claim to have never encountered internet and power outages, cybercrime like ransomware, or natural disasters because these occurrences are so common nowadays. When a disaster occurs, it requires important staff resources to resolve it. Additionally, everyone in the company's supply chain may experience delays if the company is unable to ship or deliver on schedule.
3 Techniques to Boost Supply Chain Resilience
1) Focus on Structural Resilience
Testing and modelling are essential to structure. Consider how your operations and products will need to adjust if your suppliers encounter difficulties. Your models will be more accurate the more data you have—for instance, you should be aware of the complete material flow up and down your supply chain. Creating "what if" scenarios encourages suppliers to share data. Not only does it assist everyone in identifying their own areas of strength and vulnerability, but it also aids in the development of end-to-end structural resilience and fortifies every link in the chain.
2) Stay Agile with Advanced Analytics Despite being able to clearly inspect the full supply chain structure, you are unable to use the data for further actions without advanced analytics. AI technologies like machine learning (ML), which enable data solutions to advance from descriptive analytics to predictive analytics, give rise to the modern supply chain resiliency. Your forecasting may be more accurate and your confidence in planning and logistics may rise as a result of machine learning's capacity to find patterns in large datasets. Besides, advance analytics help you remain agile when your systems accumulate more new information sources as the system process data quickly and automatically. You can concentrate on business expansion and success rather than manual data operations and ongoing troubleshooting.
3) Weigh Long-Term Considerations Long-term thinking is central to the concept of resilience. Nevertheless, it might be challenging to balance those factors in the face of quarterly volatility and yearly uncertainty.
When you have success for a while, you could be tempted to keep growing. But by straining supply systems, that might come at a price. For instance, high fulfilment costs and current supply chain challenges finally damaged the profitability of certain retailers who increased their online sales during the pandemic.
To sustain in the current market, the company should have a resilience supply chain with an ERP to reduce delay in raw material and others concern in supply chain as this might cause labour shortage.
Want to know more about how ERP can help your company increase throughput for revenue growth? Contact Finsoft for more information and let us be your trusted digital transformation partner!