October 7, 2022

State of Supply Chain in Industrial Manufacturing

Industrial manufacturing has long been a highly intensive, competitive market, where suppliers constantly try to squeeze more efficiency out of their operations.

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Industrial Manufacturing Reaches a Crossroad 

Industrial manufacturing has long been a highly intensive, competitive market, where suppliers constantly try to squeeze more efficiency out of their operations. 

But legacy technology has hamstrung them. Information is stored in a siloed way and trapped in autonomous applications. Consequently, the tools needed to piece portions of the supply chain and manufacturing processes together have primarily been missing until now. 

Adopting a digital twin enables these enterprises to consolidate information and manage the business proactively rather than reactively.

Challenges in Industrial Manufacturing

Manufacturing is a complex process that starts with collecting raw materials and eventually delivering a finished product. 

Traditionally, suppliers ran a large number of applications, and each supported one step in the process. As a result, executives and floor personnel lacked visibility into end-to-end workflows and managed reactively (making adjustments after red flags emerged) rather than proactively (addressing shortcomings beforehand). 

The pandemic exacerbated the obstacles and had a chilling impact on the market. Supply chains were dramatically disrupted. In an instant, goods stopped moving as plants, ports, warehouses, and trucking stations shut down. Companies found themselves unable to secure needed materials For instance, demand for microprocessors grew 20% from 2019 to 2022, leading to a chip shortage expected to continue at least through 2022 and probably another year or two beyond. 

Finding personnel was a problem before the pandemic: When the virus spread, employees stopped coming to work because of health concerns. “Record numbers of unfilled jobs are likely to limit higher productivity and growth in 2022, and last year Deloitte estimated a shortfall of 2.1 million skilled jobs by 2030.”

Solving Industrial Manufacturing Supply Chain Challenges 

So, manufacturers now stand at a crossroads. 

They need to find ways to boost efficiency significantly, which is the promise of Industry 4.0. This emerging concept leverages recent technical advances, such as cloud, mobile, and IoT, to transform supply chain and manufacturing processes.  

As Deloitte noted, digital supply networks and data analytics can be powerful enablers for more flexible, multitiered responses to manufacturing system disruptions.

The new solutions create more robust supply chains. Managers gain real-time updates of material flows. New reporting tools illustrate the complete cost for each product and factory. 

They have more information. Managers receive a consolidated view of forecast, orders, sales, and inventory, including production, service, and New Product Introduction (NPI).  They also work with solutions that have workbenches focused on material planning, material flow improvements, inventory optimization, on-time deliveries, and capacity utilization. The reports empower them to make decisions that lower costs, improve throughput, and increase profits.

Business planning becomes simpler. They evaluate sales, forecast demand and factory capacity, proactively manage inventory, and fully align the supply chain to optimize the factory build plan. 

They gain visibility. They are able to track key metrics, such as forecast accuracy, forecast bias, inventory turns, market share, product availability, shipping performance, and financial returns. The system automates many functions, so employees automatically receive forecasting alerts based on statistical errors, bias, and tracking signals.  

Managers see trends more easily. Intuitive interfaces help them understand cycle-over-cycle changes, such as sales mix, past dues, and backorders. Employees understand customers better, quickly serve high-priority orders, avoid unnecessary penalties, and proactively monitor exceptions.   

In sum, management has the information needed to maximize business potential. They easily see product line progress, overall financial health, product quality, manufacturing efficiency, customer support, and the need for product replacement or retirement.

Manufacturers faced unprecedented challenges in the past few years, largely due to the pandemic’s repercussions. They must invest in digital twin supply chain solutions to move forward successfully. These tools enable them to gain the visibility needed to compete successfully in today’s fast-paced industrial manufacturing sector. 

Backed by over 20 years of experience in industrial manufacturing, Tada's suite of solutions will help you accelerate your time to value. 

Request a demo today!