Manufacturers nationwide have felt the pinch of supply chain disruption. But what exactly is supply chain disruption? And how can businesses mitigate the upheavals caused by supply chain disruption?
The Delicate Links in the Supply Chain
One of the greatest achievements over the last 30 years is the tightly balanced, highly synchronized entity known as the global supply chain. Think about it. Only a few decades ago it was unimaginable to consider such a coordinated and specialized system of raw materials, components manufacturers, and fabrication shops worldwide. The relative ease with which massive quantities of goods could be shipped halfway around the world would have boggled the minds of our great-great-grandparents.
But the system, beautiful though it was, was also delicate. Sure, it withstood shocks to the system throughout the past 30 years. Natural disasters such as earthquakes, typhoons, and hurricanes closed ports. Dock workers went on strike and pirates commandeered crews. Still, shipping went on, and the supply chain remained.
COVID-19 and the Great Resignation
First, of course, came COVID-19. The outbreak of the virus was first detected in China, the region where much of the world’s raw materials and finished goods are produced. As the pandemic forced lockdowns, certain supplies became limited. Manufacturers raced to find alternative sources.
But then, of course, the pandemic continued, and what was isolated to one region of the world spread to become a global problem. As more factories and mines shut down, some raw materials became scarce. Even among manufacturers with adequate raw materials or local raw materials, workers began calling in sick. Many, unhappy with hard working conditions and re-evaluating their lives, entered what has been dubbed the Great Resignation and left the workforce altogether or sought less stressful and risky conditions.
This unprecedented collision of events, from a shortage of goods to a shortage of workers, is creating an enormous cloud of uncertainty around manufacturing facilities worldwide. How can companies create order from the chaos and manage the uncertainty?
The answer lies in cloud ERP.
Cloud ERP Helps Manage Against Uncertainty
Cloud ERP systems can help companies manage against the continuing uncertainty. Because cloud ERP systems gather data from all areas of your company and bring it into one central place, you have great visibility into all areas of your company. Leveraging this data can make a huge difference in how you respond to immediate and perceived threats, and the potential to make intelligent choices that can offset major disruptions.
With cloud ERP systems like
- Identify, manage, and track all potential suppliers, to ensure there’s always an alternative if one supplier (or many suppliers) is out of the needed goods
- Track inventory and capacity, and manage inventory levels against incoming sales and orders
- View and analyze data across multiple departments to assess operational capacity
- Analyze top selling product lines and determine how to continue selling more of what is selling well, while leveraging any so-called hidden gems in the pipeline to offset any potential gaps from supply chain issues
- Manage cash flow, accounts receivable, and payables using the reporting functions in the ERP system
Every business undergoes uncertainty. Even in the best of times, there is always risk. Right now, risks are high thanks to upheavals in almost every aspect of life: politics, natural disasters, health. With a good ERP system at the ready, your business can be ready to face these challenges as they affect the global supply chain.