There is increasing pressure on Australian manufacturers, wholesalers and distributors to continuously rethink their supply chain processes and systems to keep up with the flux in the global marketplace. Many have turned to lean manufacturing and efficiently managed supply chains to compete successfully, though these strategies also come with their own challenges.
That supply chains have matured over the years to become faster and more interconnected is undisputed; however, they’ve also grown more complex. Regardless of whether the manufacturer or a distributor has a single location or a global network of distribution, manufacturing and 3PLs, the modern manufacturing business is global, and distributed.
Manufacturers and distributors often have to manage orders and payments in different currencies, tax rates and government regulations, as well as fulfil and ship products across international borders. The downside of lean manufacturing practices and complex global supply chains is that businesses are increasingly exposed to disruption, with added cost and risk.
To meet these requirements, businesses are often forced to piece together multiple systems and processes that unfortunately obscure visibility and insight, such as separate systems for order management, CRM, inventory management, accounting, shipping and more. They conflict with key objectives to increase agility, reduce cost and risk in the supply chain and drive innovation through collaboration internally and with external partners.
To compete in a global marketplace, manufacturers and distributors need to do more than merely introduce an efficient manufacturing or supply chain system; they need to integrate and automate all of the business processes and data to support expansion, as well as to ensure cost-effective and profitable operations. They also need to be able to operate and have complete visibility of the entire business in real-time, which is only possible by operating the entire supply chain from a centralised system on the internet, giving deep and up to the minute visibility of every interaction, transaction and relationship occurring in the business in every market, anywhere in the world.
Cloud computing plays a crucial role in helping Australian manufacturers, wholesalers and distributors achieve supply chain success beyond traditional borders faster. Apart from enabling businesses to operate in global markets in real-time, the cloud allows them to establish a core platform for manufacturing, wholesale distribution, customers and supply chain that they can access anywhere and anytime, without considerations of currency and foreign exchange. A business can have all of these components in a single cloud business management system, which can completely transform and modernise manufacturing and supply chain, and can also be replicated for any new relationship.
Businesses have been traditionally using fax, email and spreadsheets, giving people access to various applications, or even relying on integrating with the suppliers, manufacturers or distributors’ systems in some other format to get complete visibility of their supply chain. All of this resulted in delays to gather, enter and collate this information, leading to heavier costs that impact their competitiveness in the market.
By transitioning people, processes and partners to the cloud, manufacturers and distributors are achieving the key objectives of a modern supply chain, rather than facing the disparate data, high costs and rigidity of traditional software and servers.
Key gains for businesses include greater visibility, improved agility and resilience, reduced cost and risk, and innovation through collaboration.
Limited visibility impacts any effort to increase supply chain efficiency, assess supplier performance, rationalise spend and ensure optimal inventory levels across channels. By modernising systems around a more unified architecture that makes on-demand visibility into real-time data possible, manufacturers and distributors are better positioned to sense and respond to customer demands and synchronise operations with a global supplier base.
Improved agility and resilience
A key differentiator in the modern hyper-speed digital world is the organisation’s ability to be agile, reacting swiftly to address challenges and seize new opportunities as they emerge while strengthening their resilience to withstand change. Progressive organisations are moving to cloud systems to launch ventures in new markets or geographies, eliminating the substantial time and cost investment demanded by traditional in-house systems.
Reduced cost and risk
Instead of tracking costs in the aggregate, leaders are monitoring and managing at a more granular level, costs surrounding logistics and fuel, tariffs and potential contingency expenses to identify incremental savings. Top performers are also slashing inventory costs with better demand-driven insights through unified, real-time data sets in the cloud while mitigating risk and strengthening compliance with internal and external requirements.
Innovation through collaboration
By moving supply processes to the cloud, it is now possible for data to flow seamlessly across an extended network. Organisations and their trading partners can also communicate with the same data, audit trails and real-time accuracy at every stage. Stakeholders can share container, pallet, location, forecasting, scheduling and unit-level data, while the common platform opens an avenue for manufacturers and distributors to capture ideas from partners to drive innovation in product quality, features and logistics among others.
Cloud-based business management software is a proven integrated platform that can support global distribution and the many complex processes and details that are part of every transaction. By integrating all supply chain processes in a single, unified system, manufacturers and distributors are positioning themselves to replace complexity with fluidity, and educated guesswork with real-time transparency and execution, working towards achieving success in volatile, fast-changing markets.
Written by Mark Troselj, managing director of Asia Pacific and Japan, NetSuite