Using Digitized Supply Chains to Improve Planning and Predictability

Manufacturers that integrate digital capabilities can reap benefits on the shop floor, in SIOP planning, and in third-party relationships. 

TAKEAWAYS:
● Digitally enabled supply chains can save manufacturers time and money by reducing guesswork about what changes to make on the shop floor.
● Companies can also make better decisions about which suppliers to choose or the best ways to distribute and deliver their products.
● Especially when it comes to inventory planning, digitally enabled supply chains and a data-driven approach to decision-making are key.  

The benefits of digitally enabled supply chains go well beyond boosting production and efficiency; manufacturers that intentionally harness advanced technologies can make their planning more accurate, demand forecasting more precise, and operations overall more predictable.

Improved predictability is especially critical at this time. As of May 2023, RSM US LLP’s chief economist put the chance of a U.S. recession at 75 percent over the following 12 months. Elevated inventory levels among industrial companies add another element of stress and potential financial risk, as RSM wrote in this June article. In this environment, supply chain visibility is of utmost importance for planning and fundamental to making more informed decisions in areas such as procurement, order allocation, expedited shipping, and avoiding costly on time in full (OTIF) penalties and accessorial fees such as demurrage and detention.

Manufacturers that integrate more digital capabilities into their supply chains can reap significant benefits on the shop floor and at other facilities, in their sales, inventory, and operations planning (SIOP), and in their relationships with third parties along those supply chains.

On-the-ground Enhancements

Industrial Internet of Things devices, digital twins, artificial intelligence (AI), and predictive data analytics are some of the technologies that manufacturers are implementing to achieve better visibility into their supply chains. That clearer picture of supply and demand will enable businesses to adjust their orders and production as needed and ultimately improve their planning and forecasting abilities, in addition to enabling customer service to better interface with transaction-level inquiries.