Businesses are faced with a historic amount of available data at all levels within the organization — and the amount of data is growing exponentially. On one hand, this is providing businesses with greater insight and contextual intelligence across the supply chain. All data gathered, however, whether it be invoices, schedules or delivery information, needs to be properly managed to ensure visibility and clarity across the entire length of the supply chain — from supplier to customer.
In order to not only handle but translate the vast amount of data available to garner greater insights into the supply chain, it’s critical for organizations to optimize the process that drives the supply chain. An optimized supply chain process can reap many benefits for the organization, including increased revenue and boosted transaction volume. Coupled with the right technology solutions to support the process, businesses can gain a competitive advantage with its supply chain, while remaining compliant.
The Challenges and Benefits of Optimization
There are many challenges managers face when looking to optimize the supply chain. Improving customer service and responsiveness, particularly related to exception processing, while reducing costs is one of the primary challenges faced. To do this, companies need to understand how the data within their supply chain can be used effectively to drive a more efficient and effective process.
For example, manufacturers need to be able to detect real-life constraints in the supply chain and quickly manage those constraints using automated processes, governed by business rules. Establishing key performance indicators (KPIs), such as cost, value, service and waste can be useful in illustrating the gap between supply chain planning and execution. Supply chain managers can continually monitor and measure these KPIs to generate detailed plans and adjust and enhance business processes into the future.
Utilizing Solutions to Optimize the Supply Chain
To optimize the supply chain, businesses would be wise to implement a solution that is configured for the manufacturing environment, focusing on production sequence, site constraints, inventory limitations, replenishment options and more. Available solutions offer organizations a range of benefits including process standardization and audit capabilities which enable the organizations to withstand the unanticipated changes in a supply chain that can lead to lower profits and excess inventory. These solutions allow manufacturing companies to programmatically manage the supply chain and address real life constraints in real-time using pre-determined business rules, so they can be more efficient which frees up resources and provides the company with greater supply chain flexibility.
The undertaking of implementing a solution to optimize the supply chain can seem daunting. Nevertheless, it’s vital to the overarching goals and processes within the business. Companies need real-time visibility so they can adapt their processes to changing economic and commercial environments, ensuring they have the right information at their fingertips to make informed decisions.
To improve business performance and efficiency, companies need to enhance key processes, such as order-to-cash and procure-to-pay. Solutions that create information silos only complicate these processes, so it’s imperative to have a flexible solution that is scalable to account for the dynamic manufacturing environment — including production sequence, site constraints, inventory limitations, replenishment options and so on.
Benefits of a Flexible Solution
Solutions must be flexible enough so they can be tailored to handle the unique aspects of each business, optimize process flows, enhance supplier and customer relationships, and deliver a competitive advantage. Digitizing processes provides flexibility, so organizations can tailor solutions to specific business needs, and enables organizations to optimize the end-to-end supply chain. Without digitization, organizations may be faced with cumbersome, manual processes that require longer lead times and result in excess inventory and lower profit. Implementing a flexible business performance improvement solution can help in a number of ways, including:
- Increased process visibility
- Improved operational and business analytics
- Lower risk and greater security
- Reduced TCO for minimized storage and administrative costs
With greater visibility into processes, organizations can resolve exceptions quickly. Digitization also simplifies business partner communications by providing suppliers and partners with flexible receipt and payment options, dynamic discounting opportunities and faster discrepancy management. Providing cloud-based supplier portals ensure that all stakeholders have the right information when and where it is needed, so they can address the challenges mentioned above. Additionally, the data generated from supply chain activities is then available for advanced operational and business analytics.
There is a deep dependency between the data that supports the business and the processes that drive business performance, so any optimization solution should also address the underlying need to secure data, while also minimizing storage and administration costs. Flexible access to data, so that users can get information to the right people in a timely fashion, is essential.
What do these flexible solutions offer for the overall business? Benefits include:
- Standardized capabilities, including document capture, automated workflow routing and reporting with built-in flexibility to meet an organization’s unique needs
- Data growth management, minimizing bottlenecks while maximizing access to data to support business processes, reporting and analytics
- Built-in audit capabilities, generating timely and meaningful business intelligence
There are undoubtedly many benefits to optimizing the supply chain, but even more so when implementing a flexible solution tailored to your business needs. It’s imperative for managers to consider their options and see how a flexible solution can increase revenue and transaction volume, all while adhering to compliance regulations — a necessity within the manufacturing industry.
Brian Shannon is Chief Strategy Officer at Dolphin Enterprise Solutions Corp.