Supply Chain disruption is here to stay; it’s not a case of if but when is the next event that impacts your supply chain (directly or indirectly). This blog explores the importance of balancing resiliency and efficiency and how the right supply chain management (SCM) software can play a vital role in enabling both.
The level of supply chain disruption organizations face has never been higher. In fact, based on recent events, Accenture even described it as a “perpetual storm of disruption”. Recent examples include inflation, skilled labor shortages, the energy crisis, geopolitical unrest, a pandemic, and the Suez Canal blockage.
In response to this, organizations are looking to strike a delicate balance between building supply chain resiliency while maximizing every opportunity to maintain and, where possible, increase efficiency. Traditionally organizations have focused on outsourcing manufacturing and various parts of the supply chain into different parts of the world to help drive down costs and increase margins.
A classic example of buying materials from one supplier, from a single country, as part of getting the best possible price through volume discounts. As we have seen recently, the risk of this approach is if something affects either the supplier or the specific country, your entire supply chain is massively impacted. In comparison, spreading your supply chain across multiple suppliers and different countries can instill real resilience should any issues occur. However, this comes at a price, in that your material costs will be higher, alongside greater complexity in planning and managing the supply chain.
While the days of outsourcing aren’t over by any stretch, the events of recent years have proved that if you don’t build resiliency into your supply chain, it can literally grind your business to a halt, considering not just the frequency but also the severity of the disruptions. As a result, the re-emergence of onshoring is not only trending as a hot topic in the board room for resilience purposes, but for a lot of companies, it’s also helping support sustainability-focused goals too. By increasing onshoring, there is also a significant opportunity to lower the overall carbon footprint; a lot less travel is needed for products to go from one end of the supply chain into the hands of the customer.
How IFS Cloud can help:
The re-emergence of onshoring means that for many organizations running an efficient and cost-effective supply chain has never been more challenging. The reality of onshoring is that for a lot of companies, it means moving to a hybrid model rather than simply choosing one primary strategy over another. A combined model underpinned by the right technology solution can help companies find the best of both worlds; mitigate the impact of disruptions while also finding efficiency gains wherever possible.
Supply Chain Management (SCM) software in IFS Cloud is an ideal technology solution to help support the move to hybrid supply chain models, seamlessly connecting your entire ecosystem, no matter whether you are operating locally or globally. In particular, IFS Cloud has some key capabilities that are real difference makers to resiliency and efficiency, specifically across transport, warehouse and sales order management.
One recent example of needing to drive greater efficiency across the entire supply chain is KAN who selected IFS Cloud. More broadly, organizations running Supply Chain in IFS Cloud will benefit from smooth multi-leg inbound logistics, an efficient warehouse picking process, and the ability to help fully utilize all available transport capacity – all part of maximizing efficiency.
Furthermore, IFS Cloud is also ideally placed to help organizations increase their supply chain resiliency by enabling better decision-making around customer orders; have that feeling of being in control through enhanced data visualization of not just the initial customer orders but also see the impact of the inevitable change order requests that come in.
You don’t have to choose between efficiency or resiliency – choose both!
As organizations react to the latest supply chain disruption and put future plans in place, one thing is for sure, disruption is here to stay. Indeed, in a recent article, Ernest and Young described companies as now having to try and navigate the “never-normal”. In fact, this sustained level of disruption has been a key contributor to a significant move away from one of the classic manufacturing business models of “just-in-time.”
As a result, organizations are now embracing hybrid production models with supporting supply chains this offers the right blend of onshoring for resiliency purposes alongside the traditional offshoring as part of keeping costs down. With this shift in mind, it’s never been more important to have the right supply chain management (SCM) software like IFS Cloud, enabling your business to survive, react to disruption, and use it as a true differentiator to thrive and grow.
Looking for more on Supply Chain in IFS Cloud? See how it fits in as one part of a total ERP solution.