Supply chain issues continue to dominate headlines and dismay manufacturers. But when you consider that in two short decades the annual value of globally traded intermediate goods tripled to more than $10 trillion, dealing with the inevitable snarls that come with such heavy traffic needs to be at the top of every manufacturer’s strategic considerations.
That’s why manufacturers are pushing to infuse as much agility, resilience, and predictability into their supply chain management as possible. And they’re turning to technology to do so. Two-thirds of CEOs in a KPMG survey reported that they’re increasing their innovation investments to cope with supply chain issues. For many manufacturing leaders, investing in a low-code application development platform has brought them the agility and predictability they’ve been seeking.
So how can you do the same?
To understand how low-code can help manufacturers manage their supply chains more nimbly, let’s first take a closer look at what a supply chain is. Supply chains are networks established between manufacturers and suppliers to cover the end-to-end processes that produce and deliver raw, semifinished, or finished goods and services. Some supply chains are fairly simple, only involving one or two suppliers, while others are incredibly complex. The more complex a supply chain is, the higher the risk that something can disrupt it, throwing a wrench into a manufacturer’s entire operation.
So, what types of disruptive supply chain challenges do manufacturers typically have to cope with?
4 common supply chain challenges
Supply chain challenges are often difficult to overcome because they’re all linked together and can occur at multiple points. The following challenges can interact in ways that can put even the most agile organizations to the test.
1. Timing
Timing is everything in manufacturing. Organizations need the right products at the right factory at the right time to maintain their operations. Anything that throws off a manufacturer’s tightly scripted timing—vendor issues, shipping delays, changed or eliminated worker shifts—can lead to huge downstream problems for manufacturers.
2. Cost
When a material becomes unexpectedly less available or more expensive—whether due to inflation, natural calamities, geo-political uncertainties, or anything else that could break a supplier’s commitments—it creates unforeseen costs. The manufacturer, who is generally working with predefined budgets, must replace that material, often at a premium expense. But supply difficulties don’t only incur financial costs; efficiency costs also must be tallied. The finely tuned chain of collaboration from engineering to manufacturing to procurement gets thrown off stride as every department scrambles to compensate for the missing material.
3. Security of supply
But costs don’t always dominate supply chain decisions. In fact, manufacturers are often happy to spend a bit more on a part if that puts them in a more competitive position. (Apple famously pursued that tactic when it bought up most of the available supply of touchscreen glass prior when developing the iPad so as to delay the arrival of potential competitors.) And, of course, no amount of cost savings for a manufacturer is going to help their bottom line if a lack of parts leaves them unable to manufacture anything. In light of this fact, procurers who once devoted themselves to relentlessly fine-tuning just-in-time inventory strategies are now making it their top priority to secure their stock of supplies, even if they have to pay a premium to do so.
4. Regulations
Manufacturers must understand and adhere to evolving regulations, such as ever-changing trade embargoes and steadily increasing environmental requirements, which add significant complexity to sourcing. For instance, the new Supply Chain Act the German government plans to enact in 2023 will require manufacturers to ensure their overseas suppliers are respecting the human rights of their workers. Stringent supply chain regulations such as this will continue to proliferate as governments seek to protect and project their national values in the global market. Manufacturers need to be continuously strategizing on how to work within the confines of those regulations.
Navigate the unplanned
Unplanned events such as those caused by supply chain issues create big risks for manufacturers. Stakeholders along the value chain often struggle to gain the necessary level of insight when processes and data flows are disconnected. Without insights, actions will be delayed across a manufacturer’s network.
Say you’re an automotive original equipment manufacturer who assembles large, semi-finished products: the console, the seats, the mirrors, the windows, and everything in between. Each product is made of parts that need to be assembled in a specified order. A delay in receiving a single part can affect the whole production process. For example, see how the semiconductor shortage is throwing the automotive OEM industry into turmoil.
You might think that an Enterprise Resource Planning (ERP) system could help solve a supply chain issue such as this. But your ERP might not be designed to communicate effectively with production systems. By the time the ERP system gets notified that there’s a supply issue, production will have already stopped. Without workarounds to keep production moving, your assembly line could come to a screeching halt.
Enabling easily digestible and actionable insights in situations like this is critical. This is where a low-code application development platform can help.
Simplify insights into predictability and agility
One of the big reasons why supply chains are so difficult to streamline is that very few people have a full line of sight into what’s going on. The magnitude of stakeholders involved in every step of the manufacturing process—from supply network creation and demand forecasting to supply planning, procurement strategizing, and transportation and delivery collaboration—makes it an extremely complex undertaking to gather all the necessary insights. This is one of the reasons why 82% of chief supply chain officers say they need to broaden the cross-domain insight-gathering skills of their workforce.
Bringing a low-code application development platform like Mendix into your development center can make gathering insights easier, adding much-needed agility to your decision-making. Low-code can help manufacturers better understand their options and the potential consequences of those options.
Low-code platforms modernize legacy systems, automate processes, and connect the disconnected. They augment core supply chain systems already in use, empowering stakeholders and business domain experts to create apps that offer insights on data, actionable tasks, and timely collaboration mechanics.
Deliver ease of use and multi-experience
Tying together the efforts of stakeholders and domain experts across the entire length of a manufacturer’s supply chain processes is made more efficient by the ease of use offered by low-code. The intuitive user interface of the Mendix platform makes it simple for domain experts to create apps tailored to the needs of both the business and the users. App creators can simply drag and drop to blend data and create an automated workflow. Just like that, they’ve created an app that can be consumed anywhere.
A low-code application platform that is multi-experience—usable by different types of users in different types of environments on different types of devices—benefits both the organization and individual users. Multi-experience is critical for making sure that everyone can access the information they need in the most consumable way for their role.
In general, people working at desks want web apps, while those on the move or working on the factory floor want apps designed specifically for mobile devices. For example, picture a tugger driver scanning warehouse containers on the move with a low-code mobile app that shares the data with the logistics team. Or a procurement manager using a low-code app on their desktop to scope out overseas supply availability. In some advanced cases, users can even harness the power of augmented reality or virtual reality.
Support sustainability
Manufacturers are increasingly interested in the power of low-code to address an emerging supply chain management issue—sustainability. In an effort to minimize their environmental impact, manufacturers are working to construct a global circular economy that produces no waste while still generating profits and competitiveness.
Low-code provides the complete overview of the supply chain needed to monitor environmental impacts. This transparency into supply chain processes that low-code opens up helps manufacturers defend against sustainability breaches that can demolish their performance and reputation.
Increase agility, resilience, and predictability
While the supply chain challenges that manufacturers face today may seem overwhelming, there are solutions to help alleviate those struggles, solutions that can also prepare companies for the supply chain of the future.
The Mendix low-code application development platform lets you build those solutions easily, quickly, and affordably. With low-code apps, manufacturers can go from simply managing their supply chains to building supply chains that are agile, resilient, and predictable enough to weather any challenge the global economy can throw at them.
