As the industry has learned, the needs of both consumers and businesses can change in the blink of an eye, and supply chains must be ready to react when demand for goods becomes imbalanced. I have. We are already a month into 2023, but economic forecasts show that businesses have a lot of work to do to stay healthy and profitable. To meet the challenges ahead and build on lessons from the past, he outlined five key supply chain strategies that will be critical for businesses to stay agile in the year ahead. . Read on and let us know in the comments how you see things from your perspective.
Near-shoring of manufacturing to ease supply shortages
this is last year digitwrote about how the pandemic has severely impacted the offshoring practices of American companies over the past few decades.
Offshoring has been the preferred and cost-effective way for American companies to do manufacturing since the 1980s. Harnessing low-cost Chinese labor to enable profitable production has allowed offshoring to remain at the top of the international manufacturing list. But when COVID hit and China halted manufacturing in multiple regions, the system was severely affected. As I wrote at the time, “the engine stopped working.”
In response, American manufacturers have gotten nervous and many have begun to focus on strategies that employ reshoring and nearshoring. is expected to.
Nearshoring works because it brings you closer to suppliers, manufacturers, and customers. Strategic placement in countries near our partners makes near-shoring a viable option today.even we Current administration talks about nearshoring with a Mexican company.
I’m looking forward to seeing the nearshore growth. Increased shipping speeds, closer communication with suppliers, and the ability to quickly respond to changes in the external supply chain are all benefits of this shift. But the time has come to combine advances in AI and manufacturing automation with nearshoring practices to increase our country’s GDP.
Accelerate adoption of AI and ML to drive people and process improvements
Adopting artificial intelligence (AI) and machine learning (ML) offers manufacturers multiple benefits, including increased efficiency, reduced costs, and new capabilities. However, the process of adopting these technologies can be complex and multifaceted.
As economic headwinds continue to be difficult for most companies, global manufacturers must learn how to prioritize digitalization and better manage risk. This can be achieved by optimizing your MRO spend analysis or by initiating a supplier intelligence solution as part of your procurement process.
This concept applies to various industries. Aviation industry, paper products, automobiles. A key step for companies beginning to adopt AI and ML is to identify specific areas of their manufacturing processes that can be improved with these technologies. This may include analyzing data from existing systems to identify patterns and trends. Companies can explore implementing new sensors and data collection systems, or cleaning up existing data for use in training models.
Once the data and resources are in place, manufacturers can start training and deploying AI and ML models to effectively improve targeted areas of the manufacturing process. After testing and validation, you can integrate your AI/ML models.
These new AI/cloud-based technologies help harmonize data and optimize supply chain network architectures. To facilitate the process, it can be integrated with existing control systems and software, or used to develop new interfaces and workflows that support the use of the model.
Successful adoption of AI and ML in manufacturing processes may depend in part on corporate culture alignment, employee training, and higher levels of risk and change. But there is value in achieving your digital transformation goals: significant savings, new features, increased efficiency, and more insight into your inventory structure.
Collaboration between manufacturers and suppliers for improvement
A key aspect of this year’s move to AI and ML is that it will enable manufacturers to work more easily and better with their suppliers than ever before. AI systems allow manufacturers to work more effectively with their suppliers.
Using AI predictive analytics and data evaluation, organizations can analyze data on sales, production and supplier lead times to find new ways to determine the optimal amount of materials and products to keep in stock. . this”material truthIt is an organization’s ability to manage inventory to “always have the right part in the right place at the right time.”
With so much data moving through enterprise systems, it’s important for enterprises to have a complete understanding of data from inventory levels, supplier lead times, order history, and more. AI technology helps manufacturers more accurately predict demand for their products. This will improve communication with suppliers and lead to a more effective supply chain.
AI communication tools are already in use by many organizations, including AI-enabled chatbots, virtual assistants, and other tools. They also help suppliers and manufacturers communicate effectively, providing real-time information on order status, delivery times, and other important data points.
Technology investment continues despite inflationary pressures
Despite high interest rates, inflationary pressures and an uncertain economy, major manufacturers continue to invest in AI and technology supply chains.
Investments are pouring into technology companies that can assist supply chain leaders with AI technology, predictive analytics, automated equipment, software systems for warehousing, distribution and logistics, and notes on information systems and controls. supply chain dive.
A typical example for early 2023 is MacroFab’s recent $42 million new capital A cloud manufacturing platform for electronics manufacturers.
In fact, nearly two-thirds (64%) of the companies surveyed in the latest survey Mitsubishi Heavy Industries Supply Chain Industry Reportreported that the nation’s largest materials handling, logistics and supply chain association is increasing technology investment in its supply chain.
another report from Capgemini Institute Nearly 40% of companies surveyed indicate that they plan to increase their investment in technology to drive business transformation and reduce costs.
As investors look to AI-enabled companies to lead the way, we see a bright future as companies transform their approach to using working capital to manage operational risk by building more resilient supply networks. I will come.
Organizations seek ways to reduce working capital as demand weakens
As business pressures and inflation continue to escalate into 2023, organizations may continue to seek ways to reduce working capital as demand declines. this is, reduction in the number of employees We are also implementing various cost-cutting measures.
Common ways companies reduce working capital include:
- Negotiate better payment terms with suppliers
- Manage accounts payable and accounts receivable more closely.
- Streamline production processes to reduce lead times
- Implement a new AI-enabled material management system to increase inventory management efficiency, including gaining more insight into inventory levels.
- Reduce overall operating costs by cutting expenses and laying off employees
These decisions must be made carefully as reducing working capital puts production and delivery schedules at risk.
Organizations can move to find opportunities to remove unused working capital from their balance sheets by implementing strategic materials management. By doing so, companies can cut costs instead of laying off employees. The benefits are that people keep their jobs, companies reduce costs across the organization, and they don’t lose top talent. We feel these are areas that many executives prefer to do long-term.