Manufacturing Supply Chain Challenges

Manufacturing supply chain challenges seem to be impacting everyone these days. Doing the physical manufacturing is just one part of running a successful operation. Another significant element is the supply chain. As you certainly know, managing supply chain challenges in manufacturing is no easy feat. There are some major challenges to prepare for, especially as your business grows.

Create a Dynamic Manufacturing Supply Chain Forecasting Model

A forecasting model will determine how much product to create, how much to charge, and what type of inventory you should keep on hand. As a manufacturer, your forecasting model will always be changing. Make sure this model is dynamic, meaning that you’re able to change it from time to time. In addition, have a semi-regular meeting with management at your company to revisit your forecasting model and make appropriate changes.

Working with the Wrong Supplier

Often, supply chain disruptions are due to working with the wrong supplier. If your supply needs aren’t being met, consider swapping to another company. In this industry, the least expensive option isn’t always the right one. Delays and poor communication can hurt your total revenue — this means that a lower-quality, less expensive supplier could be costing you more than an expensive option.

Prepare for Rising Supply Chain Costs

Supply chain costs are always rising. Historically, we’ve seen rising prices for:

• Labor costs
• Fuel
• Total landed costs
• Shipping

As such, it’s imperative that you prepare for rising supply chain costs in the future as well. It’s safe to assume that your current supply chain costs will not stay the same in the next 5 to 10 years. Ensure you have the right margins built into your product and you’re ready to increase your pricing as supply chain costs increase. Since this cost change is specific to your operation, consider tracking the year-over-year changes. This should give you a rough insight into what the coming year will bring.

Delays Caused by Partners and Suppliers

A small disruption from your suppliers or partners can lead to huge delays in delivery times. As you probably know by now, your operation often revolves around other companies that you’re working with. If you rely on different companies for raw material, packing, testing, storage, and part of your fabrication or finishing process, the delays will add up. This supply chain challenge can be managed and avoided altogether by maximizing how much work you do in-house. You’ll have more control over delays, and you’ll have more that you can do if a delay arises.

Anticipating Port Congestion

With port congestion, incoming shipments can’t be unloaded due to the station being at capacity already. Your boat filled with product will have to wait until the port can unload enough product to accept yours. This can quickly change expected delivery dates for your customers. In an effort to reduce the impact, you can give a more conservative delivery date to your customers and work with smaller shipments (if possible).

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Conclusion

It’s not always possible to predict upcoming supply chain challenges, but your operation should be prepared for changes. These tips will help you manage supply chain challenges for your manufacturing operation.