How Manufacturers Can Use Technology To Navigate Supply Chain Disruptions

Supply chain disruptions have become a significant challenge for the manufacturing sector in recent years, leading to consequences on production, costs, and customer satisfaction.

Understanding the causes of these disruptions and how to adapt to them is crucial for manufacturers like you to ensure success. This is where technology plays a key role, offering innovative solutions to help you navigate these challenges effectively. 

In this article, we explore the impact of supply chain disruptions on the manufacturing industry and discuss how you can use technology to address these disruptions.  

What are the supply chain disruptions?

Logistical Challenges: Transportation disruptions can prevent materials from reaching your business, or goods reaching consumers. Delays at ports, vehicles shortages or issues with third-party logistics can all lead to logistical issues. For example, the COVID-19 pandemic caused severe disruptions to global transportation networks, with many ports facing congestion and delays, leading to longer lead times for many manufacturers.  

Raw Material Shortages: If you struggle to obtain the essential materials needed for your products, it can lead to delays in production. Raw material shortages can be caused by a variety of factors, including natural disasters or when demand is greater than the supply. In 2020, a semiconductor shortage disrupted production in the automotive industry. This shortage was caused by increased demand for electronics and global supply chain bottlenecks, which led to production delays and price increases.

Supplier Failures: If suppliers fail to deliver materials on time, it can significantly affect your production schedules. Supplier failures could be due to financial instability, operational challenges or even a supplier going out of business. This ultimately can lead to haltered production and could leave you with the difficulty of finding alternative suppliers.

Global Events: Unforeseen circumstances, such as pandemics, natural disasters or wars, can cause widespread disruption in the movement of materials or goods. These events can have knock on effects to transportation networks and lead times. A recent example is the Russian-Ukraine war, which has disrupted global supply chains, particularly affecting transportation and logistics. Shipping through the Black Sea has been disrupted due to Russia’s military actions, stopping Ukraine’s ability to export goods such as grain. Additionally, the closure of borders has further impacted the movement of goods.  

Cybersecurity Threats: As the manufacturing sector becomes increasingly digitalised, the risk of cybersecurity threats also rises. Data breaches and cyber-attacks can compromise supply chain data and cause disruptions to operations. This could result in costly downtime and even damage to a business’s reputation if valuable data is leaked.

How can manufacturers navigate supply chain disruptions?

Technology is a key tool that can assist you in addressing these challenges and we’ve listed a few ways you can use technology to navigate supply chain disruptions.

Visibility with Real-Time Tracking: One way you can mitigate supply chain disruptions is to enhance visibility. By using technology such as real-time GPS tracking and supply chain management platforms, you can quickly identify delays, adjust schedules and re-route shipments, ensuring minimal disruption to operations. With solutions such as Sage 200 or Sage Intacct (cloud-based), you can gain a comprehensive, up-to-date view of your entire supply chain, allowing you to view risks and ensure continuity. 

Diversifying Suppliers: Relying on a single supplier for materials could lead to disruptions to your business, as demonstrated by the Russian-Ukraine war. Technology can be used to reduce this risk and manage multiple suppliers by integrating supplier data into their production processes. By using automated procurement tools, you can quickly switch suppliers or adjust orders if one supplier experiences a disruption. 

Adopting Automation Technology: To combat delays or labour shortages, your business could adopt automation technologies. This includes automating tasks such as inventory management and production scheduling, and with the help of Artificial Intelligence, you can speed up operations, reduce human error and keep production moving. Sage software is a solution that can automate many administrative tasks, which helps your business remain productive even when challenges arise.

Scenario planning with AI: A helpful tool for navigating disruptions is predictive analysis and forecasting. Advanced AI-driven forecasting can help you anticipate potential disruptions and by using technology to identify risks before they occur means your business can develop contingency plans. With Sage Intacct software, you can integrate forecasts into financial planning and inventory systems, which will help you to adapt to any shifts in demand, such as raw material shortages etc.

Enhanced Cybersecurity Protection: As cyber-attacks are a potential threat to supply chains, protecting critical data is vital for your business to ensure continuity in operations. Security is built into Sage products from the outset, keeping you compliant, up-to-date, and protected against the latest cyber threats. Advanced encryption and multi-factor authentication ensure your sensitive data is protected from issues. By utilising Sage’s secure cloud infrastructure, you can reduce the risk of cyber-attacks or data breaches.  

By leveraging the right technology, your business can be ready to tackle supply chain disruptions. Sage Accounting Software offers a range of tools to help you as manufacturers navigate these challenges.

If you would like to discuss our Sage solutions in more detail,  call us on 01332 588446 or email [email protected], and our friendly team will be happy to discuss what we offer!

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