Ongoing global development and shorter product lifetimes were straining supply chains long before the COVID-19 pandemic hit, but the scourge certainly made matters worse.
Supply chain resiliency is a looming inhibitor for many manufacturers, as shown in a recent report published by Fictiv. 94 percent of manufacturers cited supply chain resiliency as a concern. The number of complexities and unpredictable disruptions forces manufacturers into a constant state of uncertainty, leaving them with a series of blind spots that must somehow be accounted for. Supplier backups, inventory surplus, and source diversification can mitigate some supply chain disruptions, but the costs incurred from implementing some of these strategies have left many producers looking to technology to find a better way.
Blind Spot 1: Centralization
As helpful as they have been in improving efficiency and reducing cost, just-in-time manufacturing and lean protocol have centralized many supply chains, leaving manufacturers to rely heavily upon single entities to source their products. This, in turn, has contributed to supply chain fragility and has stretched many suppliers too thin to meet customer needs.
A classic example of supply chain centralization is the dependence upon China for semiconductors used in computer chips. Many manufacturers already face a supply chain backlog. Still, when the pandemic created an immediate need for more medical devices (powered by computer chips), production capacities stalled when needed most.
Solution: Supply Chain Diversification
Just as any investor diversifies investments to guard against a downturn, corporations have learned to source their products from multiple suppliers to mitigate the impact of a disruption. Manufacturers who once sourced their goods exclusively from a single nation or company now purchase a portion of their products elsewhere, ensuring that other suppliers will remain stable if one fails.
How Technology Helps
While the trend of supply chain diversification is not new, technology has empowered manufacturers not only to segment their suppliers but also their production sites. By offering alternative fabrication methods, digital manufacturing platforms give companies options for where and how their products are made.
As an example, some businesses may rely on a company’s injection molding services to build a specific part, but designing and building a mold may take time they do not have. When this happens, they may look to an alternative supplier that leverages 3D printing technology for their builds and does not require an initial stall time for mold fabrication. Instead, they can begin part production immediately and augment their manufacturing pace once their injection mold design is complete.
By giving their clients several manufacturing methods to choose from, digital platforms help companies diversify their supply chain, which reduces their risk.
Blind Spot 2: Global Policy
One of the key obstacles to supply chain resiliency is the number of disruptions that can occur at any moment. Of particular concern is international policy instability, as trade wars and tariffs can trigger immediate bottlenecks and stalls in production. When global policies shift, manufacturers are often left wishing they had a second option already in play.
Solution: Backup Supply
Similar to supply chain diversification, some companies find backup suppliers who can step up when called upon to mitigate sourcing disruptions.
In this model, companies agree to reserve a given production capacity for a potential need if a disruption should occur. The key difference between supply chain diversification and backup supply is that the former is less expensive. This is because supply chain diversification requires continual cost incursion as companies open up additional lines of business. In contrast, backup supply only incurs added cost in the event of a disruption.
How Technology Helps
Digital manufacturing platforms can assist in forming backup supply lines too. By providing a network of suppliers and methods to choose from, manufacturers know their options and can create secondary manufacturing strategies faster than they could before.
For instance, a company that typically relies on an injection molding manufacturer for its part fabrication may find its production slowed when other demands arise. When this happens, they can pivot to additive manufacturing methods to get the job done until strains on injection molding demand lessen.
By offering multiple suppliers furnished with a series of fabrication methods, digital manufacturing platforms help companies find a backup sooner.
Blind Spot 3: Oversight
Executives and managers know that some supply chain disruptions are impossible to account for — the key is to manage the ones you can. That’s why new methods of improving transparency are in demand, as limited information sharing and collaboration hurts supply chain relationships and makes them impossible to see and understand clearly.
When companies improve their visibility, they can manage their supply chains better. Visibility usually entails overseeing customer needs, supplier health, and marketplace awareness, and the more insight they gain into these three areas, the better they can see their supply chain status.
How Technology Helps
Digitalization is essential in furnishing companies with the supply chain visibility they need. By delivering faster updates, providing design for manufacturability (DFM) feedback, and facilitating collaboration, digital manufacturing platforms give clients a clearer picture of where their supply chains stand. This eliminates their blind spots and helps them manage the disruptions that they can foresee — and may provide insight into variables they could never have seen before.
Supply chain disruptions are nothing new, but the need to mitigate them will only grow stronger as globalization continues. Excess centralization, global policy changes, and lack of transparency are a few blind spots that need to be addressed. While companies can make some improvements manually, technology will be an essential part of the solution. Digital manufacturing platforms can help diversify clients’ supply base, secure a backup supply mechanism, improve visibility, and give supply chain managers the vision they need to succeed.