Four ways to improve manufacturing supply chains

What does it take for a product to become a memorable experience for your customers? It takes a resilient, agile, and hyperconnected supply chain. Sixty-three percent of companies surveyed by Bain & Company across different industries rank supply chain resiliency as a top goal compared to other business objectives. But the interplay of markets, geopolitical shifts, labor crunches, technological advancements, and changing consumer dynamics doesn’t make it easy. With manufacturers under constant pressure to reconsider their tactics, how can supply chain performance be elevated? How can your supply chain drive sustainable growth? Who should you partner with? Where to begin?

Thanks to the power of data, technology, AI, and analytics, you can architect a shock-resistant supplier ecosystem that thrives in the face of disruptions. You might need to go back to your drawing board, but focusing on the following four areas will get you closer to your supply chain vision.

1. Data is the fuel that moves the world. But how do you ensure this fuel propels the company in the right direction? Data must be accurate, relevant, accessible, and consistent across systems and departments. Today’s supply chains are a data problem – a problem that requires a modern approach. You must tap into real-time data to deploy predictive models for scenario planning, demand forecasting, and inventory management and catch shop floor issues even before they occur. This is how you can reduce the decision time between data and proactive actions while curbing operational costs

2. Talent before technology. If you think investing in the latest technology will solve all your problems, think again. Modern manufacturers are not shy about upgrading their technology stacks. But the outcomes are often far from promising. So how do you capitalize on your technology investments? You gain an understanding of the people behind your business – their fears and challenges. You can bet big if your change advocates are aligned with your broader vision. Re-evaluate your operating model to help bring clarity to roles and responsibilities. Devise training programs that help team members become early adopters of technology. Educate them to identify process bottlenecks. And assign leads who can hold vendors accountable. I’m talking about a mindset change. It won’t be easy, but it’s the only way forward

3. Design and run a hyperconnected ecosystem of suppliers. Over the years, I have seen how manufacturers struggle with supplier visibility beyond tier one. Remedying this problem is a game changer. Encourage an open engagement channel for suppliers and vendors on a bedrock of data security and governance. And incentivize them for their active participation. With engaged internal and external stakeholders, minimizing risk becomes achievable and accelerated. Add AI, machine learning, and the internet of things into the mix, along with solid nearshoring strategies. Now you are looking at better supply chain visibility, strengthening the foundation of your supply chain network

4. Protect your purpose. Modern manufacturers are conscious of the social and environmental impact of their operations beyond the factory floors due to renewed interest in circular economies. According to a KPMG study, 53% of organizations plan to increase their focus on sustainable sourcing. Use more sustainable materials because you are in the vortex of a culture shift where your company’s ethics drive customer loyalty. Develop policies that embed rigorous auditing of supplier and vendor backgrounds and internal practices. The rewards are sky-high when you and your supply chain lead your businesses with a purpose. You’ll not only meet your bottom lines but attract the right talent

Leading manufacturers will continue to embrace the move to servitization. Creating value for customers looking for personalization, ethical choices, and flexibility requires the creation of distinctive experiences. It will be a battle between internal and external stakeholder expectations. And there is only one way to win – enable end-to-end supply chain visibility through data, technology, and talent. This way, manufacturers can mitigate risks, drive operational efficiencies, optimize inventory management, and enhance customer satisfaction levels.

The article first appeared in Industry Today. It was authored by Anil Nanduru, global business leader for high tech and manufacturing at Genpact.