Global Manufacturing Report Highlights Supply Chain Visibility Challenges
Recently, Forbes and KPMG International released a survey on manufacturing entitled ‘The 2014 Global Manufacturing Outlook: Performance in the Crosshairs.” The report is based on interviews with 460 senior manufacturing executives around the world.
The report contained four key findings:
- Manufacturers plan to invest in enhancing processes which increase profits
- Organizations will increase R&D spending, including outside collaborations and leveraging technology
- Supply Chain visibility remains a challenge.
- Manufacturers want to achieve a globally integrated supply chain and share real-time information with suppliers
The last two points of the report regarding supply chain visibility and sharing real-time data are the challenges that Ultriva is uniquely positioned to address. To quote the survey, “Supply chain transparency and visibility remain a key challenge for manufacturers.” The report notes that forty percent (40%) of manufacturers lack visibility across the extended supply chain; double from last year. Visibility it is imperative and manufacturing company executives need to make visibility their number one mandate. These data demonstrate an awareness that visibility is needed to optimize the supply chain and that the lack of real-time, shared data is hurting the bottom-line.
The survey also points out that a third of the respondents believe that lack of supply chain visibility was a direct result of inadequate IT systems. KMPG analysts suggested this lack of visibility stems from the “inside the four walls of the factory” focus. With the increase of global supply chains, manufacturing companies must break outside the four walls mentality; otherwise this lack of visibility will continue to drive less impressive stakeholder bottom-line results. The solution is a cloud-based software that gives all parties (suppliers and buyers) real-time actionable data.
The Forbes KPMG report suggest that manufacturers willing to share real-time data with suppliers made significant gains in supply chain visibility and actionable business data. This represents an important paradigm shift. Understandably manufacturing companies did not want to give access to MRP system information and data to those outside the four walls, there was no need and it was confidential. Outside the four walls and with cloud-based supply chain management software can show only the data supply chain partners need to see to produce best-practices, lean mandates, and partner well with the manufacturing company.
There is good news in the report noting that supply chain visibility in the manufacturing sector has increased in the last twelve months alone. The data suggests that about twenty percent (20%) today claim to have full visibility compared to just nine percent in 2013. This trend will continue, yet offers little consolation to those manufacturing enterprises not currently collaborating in real-time and experiencing shrinking profitability.
A globally integrated supply chain will be achieved within the next three to five years represent the opinion of the majority of respondents. These optimistic perceptions correspond to those who report using global demand planning and other technologies in their supply chain currently. More than three-quarters suggested that relationships with top tier suppliers, is now strong enough for them to share real-time capacity and demand data. It is in the beast interests of all that data be shared across the supply chain, all suppliers all the time.
Smart manufacturing companies are starting to realize that the supply chain can be optimized by sharing data and moving beyond the walls of the proverbial factory. I will leave you with one last thought. Organizations that continue “to optimize their processes in near real-time will reap significant rewards, such as dramatically reduced working capital and lower exposure to risk. Those that are not able to harness their data in this way will be at a major competitive disadvantage,” stated Mark Toon, CEO of KMPG, a report sponsor.