When a new administration takes office, changes to legislation can be expected. Oftentimes these changes lead to certain industries needing to plan and react to how their businesses may be affected. For manufacturing, currently the focus is on potential tariffs on imported goods in an effort to dissuade offshore manufacturing. As manufacturing executives keep their fingers on the pulse of this conversation, they will need to start preparing now for how potential legislation or added tariffs will affect their operations, including bringing business back onshore to the U.S.
While the reality of bringing manufacturing operations back onshore may seem challenging, there are some benefits. These include significant flexibility in managing supply and demand, shorter production/delivery times and reduced logistics costs, which can result in increased profitability. To achieve the efficiency and agility needed while capitalizing on the opportunities an onshore transition presents, companies can leverage certain technologies to automate the supply chain. Such solutions as Enterprise Resource Planning (ERP), Product Lifecycle Management (PLM), Design and Sourcing and Shop Floor Control (SFC) help brands manage both offshore and onshore operations. These technologies allow for quick adjustments should there be a change in manufacturing locations resulting from new legislation. Let’s take a deeper dive into how each solution can benefit supply chain management:
Enterprise Resource Planning – ERP manages all critical business transactions across the supply chain from customer orders to deliveries, planning to production, raw materials to finished products, and everything in between. This real-time, enterprise-wide visibility delivered through a single platform provides a holistic view of all inventory, enabling brands to keep track of stock availability and supply chain operations no matter the location of their manufacturers, whether in the U.S. or overseas. And, if manufacturing operations do move onshore, ERP solutions help brands make the most of the significant flexibility in managing supply and demand by enabling the company to respond even faster to market changes and customer demands. Robust ERP offerings can also centralize smart data provided by other solutions such as integrated electronic data interchange (EDI) and point of sale (POS) to help manufacturers sense demand changes, product movement and related updates, and respond accordingly. This includes visibility into which items are selling well, what sizes or colors of a product are most popular, where sales and returns are made, and what product is arriving where and when. With this data automatically integrated into an ERP platform, manufacturers can manage inventory and leverage the flexibility in matching supply and demand to meet consumer demand more effectively.
Shop Floor Control – SFC helps manufacturers make the most of their operations – onshore or offshore – improving productivity without increasing costs. SFC systems track an operator’s time (time clock) as well as productivity, the number of units completed, operation status and who completed a task. This data, when rolled up and delivered through real-time dashboards, allows the manufacturer to analyze issues on the factory floor without any delay, and react to changing customer demand and product mix by adjusting and changing operations to optimize production. With SFC, shortfalls in any operation can be easily spotted and the system can recommend which employee(s) to utilize to fix the imbalance based on individual skill sets and terminals. The SFC system also provides feedback on piecework earnings, goals/targets and other incentive-related information that enable operators to know exactly what they would be making. SFC enables manufacturers to increase efficiency and ensure they are optimizing all production while saving costs, in any location.
Product Lifecycle Management / Design and Sourcing – PLM facilitates collaboration among various stakeholders (e.g., product design, merchandising, technical development, sample evaluation, lab tests, sourcing, costing and, vendor collaboration) throughout the supply chain, enabling them to communicate using a centralized shared data model and streamlined process. Coupled with end-to-end workflow tracking, brands can very easily onboard onshore and offshore trading partners if they need to change supply chain operations. This solution facilitates quicker product launches, thus allowing for reduced time to market as well as improved productivity. If raw materials and manufacturing move onshore, robust PLM can leverage significantly reduced production times. With a comprehensive set of tools to manage the entire product lifecycle, PLM enables brands to tweak product designs, produce smaller batches of products to test the market, and try out different business models to react better to the changing market and capture more sales. It helps brands create more profitable products. By providing one version of the truth for the details and status of each product under design and development, PLM enables brands to quickly shift production, no matter the location of the manufacturer, as customer demands change.
By leveraging these technologies, brands can streamline supply chain operations and achieve optimal efficiency. For brands that currently manufacture offshore and are preparing to quickly change their operations should there be a change in legislation, agility is king. By taking full advantage of these technologies, brands can capitalize on onshore manufacturing opportunities to ensure ongoing production and a healthy bottom line.
Ajay Chidrawar is VP of Global Product Management & Customer Success at CGS.