Companies, specifically industrial manufacturers, are slowly beginning to recover from the immense supply chain disruption left in the pandemic’s wake. The supply chain landscape is now more dynamic than ever. Companies must become more creative and vastly more nimble to reach their goals. Most companies, however, do not consider the full spectrum of their supply chain needs. Manufacturers and heavy industrial companies are seeking ways to create new efficiencies, gain greater insights through their data, and grapple with the ever-shifting labor landscape. While supply chain conditions may be improving, the need to optimize operations for profitability and efficiency remain.
To optimize, companies must consider how they can deliver products and services on time, but also how to modernize operations through automation, IoT and digital solutions. Here are key strategies to tackle the mounting challenges with doing business in today’s global economy and ensure growth and resiliency in the future:
Prioritizing digital solutions for increased efficiencies
It is no surprise that there is a push to modernize facilities, adapting the latest technologies and undergoing the digital transformation needed to stay competitive in today’s market. Digitally transforming your business starts with strong, scalable foundational technologies. These are the building blocks for future technologies that support new business models and allow you to maintain a competitive market edge.
However, in this area, one size does not fit all. Industrial end-users require a more nuanced and creative approach. Technology now allows facilities to connect their drives, controls, and other equipment to the cloud along with the various sensors that monitor them. The benefits are enormous, but also open up many other considerations: what are the cybersecurity implications, can this information serve as a basis for making critical business decisions, and is there a dashboard to aggregate all of this information to one unified platform?
All these questions and more will shape the future of your operation and its ability to compete.
The timely exchange of information, updates, and feedback can enhance the efficiency of the supply chain, leading to better decision making, problem solving, and risk mitigation.
Identifying strategic partners to profitably support global operations
The second best practice is to review your current vendor/supplier list and consider if the role they are playing in your operation is supporting you as well as it could be. From there, evaluate how other strategic distributors and suppliers that have vast product knowledge could provide an operational edge that leads to cost and labor savings.
Consider, for example, a heavy industrial manufacturer with global operations. While standardization across operations is the ideal model, highly nuanced and technical realities do not allow for a one-size-fits-all approach. These manufacturers must find the right balance: a company that has a global presence with local and regional prowess that can also efficiently and profitably support the manufacturer’s critical operations. One solution is to strategically partner with suppliers who can own more of the total supply chain ecosystem so the manufacturer can focus on producing the goods that it sells. Distribution centers, warehouse management systems, transportation programs and management systems are only part of the total equation. What happens when those goods arrive at the manufacturing site?
Strategic partners that can connect the sourcing procurement and delivery of critical inventory with the overall management of the inventory on site are extremely valuable to the overall value proposition. Finally, connecting everything digitally to make sure the best business decisions are made is paramount to companies wishing to remain competitive.
Optimizing labor resources for long term success
While automation exists to streamline warehouse processes like inventory/asset tracking, facility monitoring and assisting workers on the warehouse floor, the manufacturing labor force still requires a lot of manual and semi-automated tasks. Acquiring workers with the necessary technical skills and experience to perform complex tasks, retaining workers, and managing the costs of labor continue to be very difficult. As a result, many are increasingly relying on temporary or contract workers, which can result in higher labor costs and decreased worker stability.
The labor crunch has expedited the need to put solutions in place to ease the burdens of work that doesn’t require manual labor. To address these challenges, manufacturers are investing in training programs and exploring new technologies like robotics and automation solutions to reduce their dependence on skilled labor.
By leveraging industrial connections and interactive interfaces, robotics and automation can make even the most complex programming tasks able to be managed by frontline operations, making factories less dependent on technical experts and engineering departments. They can also work in dirty or dangerous locations that may pose a safety hazard for physical workers, or on jobs that require repetitive motions or tasks to be carried out for long periods of time.
The challenge is that fewer and fewer companies around the globe can scale to meet the needs of some of the larger global industrial companies. Managing complicated nuanced project deployments in remote parts of the world while maintaining the right kind of vision and analytics across operations has become more important than ever.
Companies are placing a much larger focus on labor optimization, expanded data analytics, increasing buying power, and partnering with the right mix of suppliers that can deliver critical parts for their operation. To gauge whether these three strategies are moving the needle, establish measurable goals, regularly reviewing KPIs (fulfillment rates, on-time delivery, and cost per unit) to track your progress and identify opportunities to optimize.
Scott Dowell is Senior Vice President and General Manager, US Industrial at Wesco. Headquartered in Pittsburgh, Pennsylvania, Wesco is a FORTUNE 500® company with more than $21 billion in annual sales and a leading provider of business-to-business distribution, logistics services and supply chain solutions. Wesco offers a best-in-class product and services portfolio of electrical and electronic solutions, communications and security solutions, and utility and broadband solutions. The company employs approximately 20,000 people, partners with the industry’s premier suppliers, and serves thousands of customers around the world.