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Integrating Supply Chain Management with MOM

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23
November

Integrating Supply Chain Management with MOM

November 23, 2023
In Blog
A supply chain is utilized by businesses of all sizes, from start-ups to large corporations, that engage with inventories. To thrive in today’s fast-paced market, manufacturing enterprises require an efficient and finely-tuned supply chain.
This blog will delve into the components of a manufacturing supply chain, exploring how digital supply chain management tools contribute to optimization.

A Supply Chain: What Is It?

A supply chain is a group of people and businesses that work together to produce a good and deliver it to the customer. The manufacturers of the raw materials represent the first link in the chain, and it concludes when the van transports the final goods to the customer.
The outcomes of an optimized supply chain include a more efficient production cycle and reduced costs, making supply chain management an essential procedure. Businesses aim to streamline their supply chain processes to save expenses and maintain competitiveness.

An Understanding of a Supply Chain

The supply chain encompasses every stage required to deliver a finished good or service to a client. One of the stages may involve a distribution center or retail location where the final items are distributed to customers after raw materials are sourced, moved to production, and completed.
Entities such as producers, suppliers, warehouses, transportation firms, distribution centers, and retailers are integral parts of the supply chain. The supply chain initiates when a company receives an order from a customer. Therefore, its key responsibilities include product creation, marketing, operations, distribution networks, financing, and customer service.
Efficient supply chain planning can reduce a company’s total costs and increase profitability. A broken link in the chain can impact the entire process, leading to potential losses.

Which Are the Principal Models of the Supply Chain?

Numerous varieties of supply chain models are available, and the choice of model depends on how an organization is structured and its specific requirements. Here are a few examples:
Continuous Flow Model : For businesses manufacturing similar goods with slight variations, the classic supply chain strategy proves effective. This strategy is most suitable when there is a strong market for the products and minimal to no redesign is required. Managers can optimize production schedules and enforce strict inventory management due to the absence of significant variations. To prevent production bottlenecks, managers must consistently restock raw supplies following a continuous flow approach.
Fast Chain Model : For businesses that rely on current trends for product sales, this strategy functions effectively. Companies utilizing this model must promptly launch their products to capitalize on the current trend. They need to swiftly progress from concept to prototype to manufacturing and, ultimately, to the final customer. An industry that employs this supply chain strategy is fast fashion.
Flexible Model : The flexible approach is frequently employed by businesses that produce seasonal or holiday goods. These businesses experience spikes in demand for their products, followed by prolonged dips without direction. Thanks to the flexible approach, they can quickly ramp up production when demand surges and efficiently shut down when demand tapers off. To turn a profit, these businesses must be precise in estimating their labor, inventory, and raw material needs.

Supply Chain for Manufacturing

The lifecycle of a product begins with its raw ingredients and ends when the final product is delivered to the customer. In this lifecycle, the manufacturing company acts as an intermediary.
The phases in the supply chain that precede production are known as upstream operations. The steps that follow the manufacturing process further down the supply chain are known as downstream operations.
Purchasing raw materials from vendors or suppliers is a part of a manufacturer’s downstream activities. This comprises:
  • Locating and assessing vendors.
  • Establishing guidelines for the materials’ quality.
  • Ensuring that the correct amounts are bought on schedule
The downstream processes commence when the manufacturer transforms the raw ingredients into a finished good ready for sale. Wholesalers, distributors, or retailers are responsible for delivering the final product to the customer. Software for manufacturing can assist businesses in enhancing their manufacturing capacity and the flow of goods, given the numerous moving elements involved.
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Process of Supply Chain Manufacturing

Careful planning and management of each link in the supply chain are necessary for the production process. Let’s now examine the primary procedures that constitute a manufacturing supply chain:
planning

Planning

At this stage, businesses create a plan outlining how their goods will meet the requirements and needs of the consumer. The primary goal is to establish a system that maximizes earnings.

Sourcing

Sourcing

Building ties with suppliers is the primary goal of this phase. Reliable suppliers significantly enhance the productivity of industrial activities. Several strategies for raw material delivery, payment, and shipment are also planned during this phase.

Returns

Returns

Handling the return of a damaged product is the final step in the supply chain manufacturing process. Careful consideration is required to adopt adaptable and practical supply networks for managing returned goods. During this phase, customer care staff must also address complaints and inquiries from customers.

Delivery

Delivery

After orders are accepted, delivery arrangements are made during this logistics stage. Warehouse establishment, carrier selection, and invoicing system setup are all completed during this phase.

Production

Production

This phase encompasses design, manufacturing, testing, packaging, and product distribution. It provides businesses with crucial information to assess productivity, output, and quality standards.

Industrial Supply Chains’ Effect on Enterprises

Cost-effectiveness, production and delivery speed, quality control, risk management, and others are the main ways the manufacturing supply chain affects enterprises. To obtain a competitive edge in their field, firms must consider all these elements, which have a direct impact on consumer satisfaction.
Economical-Effectiveness

Economical Effectiveness

A significant portion of a company's expenses is usually attributed to the direct cost of manufacturing items. Businesses can achieve cost savings and maintain or grow their profit margins by optimizing their supply chain operations and processes, all while providing customers with competitive rates.

Production-and-Delivery

Production and Delivery Speed

Client loyalty may rise when orders are fulfilled more quickly, thanks to a quick production process. Furthermore, companies can swiftly adjust their operations to meet shifting demand and outperform slower rivals by having a flexible manufacturing supply chain.

Quality-Assurance

Quality Assurance

The quality of an organization's production process and the final products are inextricably linked to the supply chain, from raw materials to the stages directly involved in manufacturing. Better assembly techniques, materials, and higher-quality control checks enable companies to produce goods that satisfy consumer demand and win over new ones.

Risk-Management

Risk Management

Should interruptions occur, such as those brought on by natural catastrophes or breakdowns in international trade, a corporation that relies on a susceptible supply chain may find itself without materials. Businesses can minimize risks and maintain a seamless manufacturing supply chain even amid industry slowdowns by establishing backup plans and supply chain contingencies, such as partnering with several suppliers.

Excellence

Encourage a Culture of Excellence to Gain a Competitive Edge

Establishing a quality culture centered on client happiness, cost reduction, and product innovation can be achieved by integrating supply chain management into production operations. This provides a competitive advantage by offering better services and goods.

supply-chain

Take Advantage of Digital and Autonomous Supply Chain Opportunities

Real-time monitoring of capacity, demand, and supply by manufacturers through digital supply chains enables them to make better decisions and respond to market shifts more quickly. Autonomous supply chain processes enhance customer service, cut costs, and improve inventory accuracy, allowing manufacturers to improve the efficiency and dependability of their supply chains through technology

Logistics Management for Business Versus Supply Chain Management

Supply chain management and corporate logistics management are often used interchangeably. Even though they both address supply chain management, they focus on distinct facets of SCM.
Let’s examine the points of overlap and divergence between logistics and supply chain management.
Both Logistics and SCM:
  • Effectively transport, store, and distribute commodities.
  • Ensure that the flow of goods is uninterrupted at every stage of the supply chain. 
  • Organize data or products and services.
  • Boost client satisfaction as a result.
Nonetheless, supply chain management (SCM) encompasses not just logistics management but also includes labor, manufacturing, distribution, and production. The various facets of supply chain management include logistics. The concentration area is what separates the two. Enhancing the effectiveness of procedures across the supply chain is the aim of supply chain management. On the other hand, timely client satisfaction is the aim of logistics.
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Best Practices for Supply Chain Management

Supply chain managers must adapt to the expanding size and velocity of the global market. Efficiently achieving this requires implementing the following recommended practices:
Encourage cooperation among all participating companies

Encourage cooperation among all participating companies

Create measurements to gauge effectiveness

Create measurements to gauge effectiveness

Reduce waste and expedite inventory

Build a supply chain that is robust and has short cycles

Build a supply chain that is robust and has short cycles

Integrate technology into the supply chain

What Is the Flow in Manufacturing Costs?

Effective supply chain optimization ensures that each component of the product is delivered where and when it is needed. Controlling the flow of production costs is crucial for this process. Businesses that manufacture goods requiring a wide variety of parts from numerous vendors should be particularly concerned with the flow of manufacturing expenses. For instance, a clothing maker would require simultaneous deliveries of thread, trim, zippers, and fabric. Supplies arriving sooner than expected must be stored at the company’s expense, while delays result in machines remaining inactive as people wait.

Manufacturing Supply Chain Solutions

Closing gaps in the supply chain and ensuring businesses effectively satisfy customer needs are the goals of a supply chain management solution. Gaining a competitive edge requires firms to implement a customized solution tailored to meet their unique demands.
One method to achieve this is by implementing business management software capable of addressing the issues in the industrial supply chain.

Having Trustworthy Suppliers Is Essential

Trustworthy suppliers are crucial for an effective supply chain management procedure. This means they produce a product that meets the requirements set forth by the manufacturer and deliver it on schedule.
For example, XYZ Furniture might produce high-end furniture, while a supplier provides metal handles and other attachments. It is imperative that these components last for many years and function as intended. The metal components must be vital, and the products should adhere to the manufacturer’s specifications on design and quality.
A dependable supplier ensures that orders from manufacturers are filled, and parts are shipped on schedule.

How Can You Use Smart Factory Mom to Manage Supply Chain Risks?

Smart Factory MOM is a valuable tool for managing supply chain risks by providing real-time visibility, predictive analytics, inventory optimization, accurate production scheduling, supplier collaboration, quality control, and other capabilities that help you proactively address and mitigate potential disruptions in your supply chain.
Here are some of the ways Smart Factory MOM solution can be used to mitigate supply chain risks.
Monitor supply chain performance

Monitor Supply Chain Performance

Smart Factory uses data from different sources like sensors, ERP, MES, CRM and PLM to monitor your supply chain performance in real time. The Analytics module of the Smart Factory MOM provides live dashboard and reporting to track key performance indicators (KPIs) such as inventory levels, quality metrics, production downtime, and more. These KPIs enable you to address specific issues before they start impacting the overall performance.

Optimize Supply Chain Planning

Smart Factory MOM possesses advanced features and functionalities that help in accurate production scheduling, resource allocation and balanced supply and demand. A MOM solution, in general, can be used to simulate the impact of a potential disruption like supplier failure, a huge surge in demand or a new regulation.

Integrate supply chain processes

Integrate Supply Chain Processes

With Smart Factory MOM, you can effortlessly share critical data, insights, and information across the entire manufacturing value chain, including suppliers, customers, partners, and regulatory bodies. The Smart Factory MOM solution has the ability to automate workflows, synchronize actions, and align objectives across the production lifecycle. This level of integration ensures a streamlined and synchronized manufacturing process.

Innovate Supply Chain Solutions

Smart Factory MOM solution transforms your supply chain solutions with advanced technologies like predictive analytics, and Internet of Things (IoT). These advanced technologies can be used to create new value propositions like customized products, smart solutions and circular economy models. Innovation in supply chain solutions ultimately lead to increased customer loyalty and satisfaction.

Contact us today to learn more about how we can help you implement, train, and maintain the Smart Factory MOM solution and count on us to help you overcome any hurdles along the way.
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To Sum Up

The body’s circulatory system can be compared to the industrial supply chain when creating a product. Materials move efficiently from start to finish, thanks to each stage of the process. However, if there is an obstruction in any of these veins, the entire system is put at risk.
Manufacturers need a thorough understanding of their supply chain to increase efficiency and maintain a competitive edge. The most effective approach is to use a digitalized manufacturing SCM solution.