Modern manufacturers receive their supplies from a global market. To stay competitive, manufacturers have to shop around for raw materials, even if they have to be transported from halfway around the planet.
This extending supply chain has led to some difficulties. Supply Chain Brain reported the results of an Aberdeen survey that collected the concerns of 150 manufactures and retailers. One of the major issues that the report discovered was visibility of supply chain procedures. Seventy-nine percent of respondents stated they wished to improve the visibility of manually-driven processes. Those surveyed indicated coordinating all parties involved in a global supply chain was the second major concern.
Data tools like Microsoft Dynamics NAV or barcode scanners automate information collection and provide visibility of distribution and warehouse procedures. Only 6 percent of respondents said they had fully automated processes, and most said their global supply planning was only 50 percent as automated as domestic practices.
Purchasing supplies for production is a huge cost for manufacturers. Companies must have tools to ensure the raw materials they are buying are put to use and their suppliers don’t short them.
According to the Express Tribune, raw material acquisition can account for 70 percent of a manufacturer’s sales revenue. Since supply procurement is such a valuable piece of a company’s bottom line, every inch of the material must be measured. ERP software gives business leaders visibility of supplier goods as soon they enter the dock.
Scales and barcode scanners plugged into the company ERP infrastructure can report any problems as soon as they are detected. Barcode scanners can also capture deliveries and automatically calculate warehouse inventory levels. Warnings are established should vendors consistently deliver faulty shipments or supplies become low. Having the necessary level of available materials is crucial to warehouse productivity.
The cost associated with raw materials is not just the price of sale, companies have to spend money to store and handle materials, train warehouse workers and transport supplies. Ongoing inventory control must be considered when negotiating with suppliers and planning supply-chain schedules. Barcode scanners and ERP software are daily tools for consistent reporting of warehouse performance.
Hard data is less likely to get lost in translation. If a company can report actual numbers and real-time information from its supply chain software to a global partner, then there is no need for accusations or blame. Both companies are working off a centralized platform as opposed to constantly moving information through different channels so mistakes or shortages are less likely.
Supply Chain Quarterly suggested businesses should create alliances with their primary vendors. Supply chain partners can use ERP software to create a hub for constant communication. Performance goals and distribution metrics are defined by both parties. A centralized system makes all unified data visible. If an issue occurs, supplier and manufacturer are aware instantly and can communicate to settle on a resolution. Any changes or fixes are seen throughout the supply chain and become a part of the alliance visible history.