Six Ways To Optimize Supply Chain Management

Jun 16, 2021 8:15:00 AM / by ThinkIQ

Back when America Online CD-ROMs, Netscape Navigator, and the tumultuous buzzing noises of a modem connecting over dial-up were synonymous with the World Wide Web, we were told the promise of the internet would be a great free exchange of information at our fingertips. Coming from a world dominated by television, radio, and print, it was quite an abstract concept to grasp. What more could it result in than real-time sports scores, and only if you happened to be sitting in front of an internet-connected computer?

Early on, chat rooms and forums were quite the novelty. Later, the first social media platforms were quaint if not a bit awkward. Now the flow of information has matured into a 24-hour news cycle, very public airings of grievances, feverish ecommerce, and an ecosystem of devices and apps that seek our attention every waking moment of the day. So this is what they meant. We no longer sip information from a cup; we’re being dropped from a helicopter into the middle of the Pacific with arm floaties. Hey, knowledge is power, after all. We appreciate living in a more informed society, despite legions of armchair specialists at the ready eager to project authority after watching two or three TikToks.

What this unmanned, whipping fire hose of social information needs is optimization. And optimization isn’t just in the technology itself, but in how we use it.

Optimizing Supply Chain Management  

The same applies to supply chain management. Once upon a time, back when man took his first small steps onto the surface of the moon, the Third Industrial Revolution also blasted off and brought with it the promise of supercomputers, telecommunications, and other monumental strides in technology. But now with the rise of the Fourth Industrial Revolution, technology has matured to the point where another fire hose of data is whipping around, this time among manufacturers, suppliers, and vendors.

So how do we get it all under control? Optimization of course. Here are six ways manufacturers can optimize supply chain management:

  1. Collaboration
    Much like the free and open exchange of information on the internet and social media, so too does every link in the supply chain need to embrace our powers of communication and collaboration. And what good is it to outfit and connect equipment with Internet of Things (IoT) sensors if humans don’t connect as well? When collaboration between manufacturers, suppliers, vendors, and retailers is established, demand forecasting and inventory management becomes more accurate, inventory levels are reduced, fulfillment rates are optimal, and margins and profitability are increased. We have all this remarkable communications technology at our fingertips, we might as well use it.
  2. Responsiveness
    Why prioritize collaboration? It strengthens business relationships across the supply chain, which in turn leads to greater responsiveness. Point-of-sale data and social media information can inform the rest of the supply chain to adapt quickly to spikes in demand.
    Everyone is happier, from suppliers to manufacturers to customers, when inventory can be repositioned, service is efficient, and maximum value pulled from all available resources.
  3. Automation
    With all of the technology available to manufacturers today, there is simply no excuse to operate through the tedium of manual processes. Nevertheless, 79 percent of large enterprises report that their top concern is a lack of supply chain visibility due to manually driven processes. Artificial intelligence (AI) and machine learning (ML) garner all the buzz because they are key in making smart manufacturing, well, smart. It’s how we can track things at a granular level and create an end-to-end supply chain. This is, in fact, where ThinkIQ beats the competition.
  1. Total Cost of Ownership
    The smartest companies don’t approach procurement simply in terms of acquisition price. They understand the larger value in total cost of ownership. It varies, but acquisition price for most products and services only accounts for 25 percent to 40 percent of the TCO, and sometimes accounts for as little as 10 percent. In other words, you’re only really appreciating the cost of doing business when you’re also taking into account labor, warehousing, transportation, and distribution costs as well. Here again, collaboration and responsiveness play major roles in controlling and accurately determining TCO.
  1. Finding Inventory Efficiencies
    Inventory management is a key ingredient in optimization. Knowing what you have, how much it costs to keep it, how much it costs to move it, and how much your customers want it can make all the difference in the world. There’s also the obvious variables involved with resilience. How far away are your operations from prohibitive delays and costs? A generational healthcare emergency away? A disruption to global transportation away? An IT hack away? ThinkIQ delivers the fact-based granular data-centric contextualized material flows and related provenance attribute data your operation needs to improve yield from 45 percent to 90 percent, which has resulted in tens of millions of dollars in operational savings.
  2. Environmental Responsibility
    Now more than ever, the onus is on organizations to reduce their carbon footprint. Consumers demand a more sustainable and socially responsible world, and will put their money toward companies that share the same philosophy. Thankfully, ThinkIQ’s Digital Manufacturing Transformation SaaS identifies excess waste and reduces warranty reserves for quality and safety issues, making eco-conscious processes far more tenable, environmentally sound, and business-friendly. We’ve seen up to 99.999 percent elimination of recalls, which leads to significant savings in the face of trillions of dollars lost every year in cost and foregone profit.

If you’re ready to explore how you can optimize supply chain management in your operation, contact one of our experts for a consultation today. You can also start by downloading our eBook titled "Advanced Material Traceability Revolutionizes Digital Transformation".

Tags: SMART Manufacturing, Supply Chain Optimization, Supply Chain Management

ThinkIQ

Written by ThinkIQ

Think IQ

The Industry 4.0 Data Revolution

Proven to improve manufacturing yield, safety, quality, and compliance by making sense of your data.

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