The key to supply chain success

By integrating all supply chain processes in a single, unified system, manufacturers and distributors can replace complexity with fluidity, and educated guesswork with real-time transparency and execution. Mark Troselj reports.

Australian manufacturers, wholesalers and distributors are under pressure to rethink their supply chain processes and systems as a result of the many curveballs the global marketplace keeps throwing their way.

No longer can they think that their business won’t be impacted, as it certainly isn’t easy to remain viable and thrive in this current environment. Many have turned to lean manufacturing and efficiently managed supply chains as the foundations for how successfully they can compete. But they also don’t come without their own challenges.

There’s no doubt that supply chains have matured over the years to become faster and more interconnected, but they’ve also grown more complex.

The truth is that no matter whe­ther the manufacturer or a distributor has a single location or a global network of distribution, manufacturing and 3PLs, all modern manufacturing business is global. Between multi-tier supplier networks to globally distributed customers, all business is distributed. More suppliers mean more points of integration across supply chain infrastructures.

It’s also not uncommon for a manufacturer and distributor to have to manage orders and payments in different currencies, tax rates and government regulations, as well as fulfil and ship products across international borders. Unfortunately, the development of lean manufacturing and complex global supply chains have left businesses increasingly exposed to disruption, while adding 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, customer relationship management (CRM), inventory management, accounting, shipping and more. They conflict with objectives to increase agility, reduce cost and risk in the supply chain and drive innovation through collaboration internally and with external partners.

Purely putting in an efficient manufacturing or supply chain system isn’t going to save a business. To keep up with the global marketplace, manufacturers and distributors desperately 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. You can only do that with technology via the internet. That means operating your entire supply chain from one system on the internet – giving you deep, and up to the minute visibility of every interaction, transaction and relationship occurring in your business in every market, anywhere in the world.

This is where cloud computing plays a crucial role in helping Australian manufacturers, wholesalers and distributors achieve supply chain success beyond traditional borders faster. The Cloud gives businesses the ability to operate in global markets in real-time and establish a core platform for manufacturing, wholesale distribution, customers and supply chain that they can access from anywhere and at 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. They can then just replicate for whichever supplier, distributor, retailer or wholesaler they forge a relationship with and be up and running with that system in real-time and at the same time.

Traditionally, businesses have been doing this by fax, email, Excel spreadsheets and by giving people access to separate instances of applications in different countries. Others have been relying on integrating with the suppliers, manufacturers or distributors’ systems in some other format.

All of this resulted in delays to gather, enter and collate this information to get a real view of what was happening in the supply chain. It also resulted in heavier costs most distributors and manufacturers are looking to strip out to increase their competitiveness.

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.

Businesses stand to gain:

  • Greater visibility: Limited visibility is a key foil in efforts 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: In our hyper-speed digital world, fortune favours those who can react swiftly to address challenges and seize new opportunities as they emerge. Progressive organisations are moving to cloud systems and eliminating the substantial time and cost investment to launch ventures in new markets or geographies that traditional in-house systems require.
  • Reduced cost and risk: It’s no longer sufficient to track costs in the aggregate. Leaders are monitoring and managing at a more granular level costs surrounding logistics and fuel costs, tariffs and potential contingency expenses to identify incremental savings.
  • Innovation through collaboration: Moving supply processes to the cloud makes it possible for data to flow seamlessly across an extended network. Organisations and their trading partners can also communicate in lockstep with the same data, audit trails and real-time accuracy at every stage.

There is no doubt that cloud-based business management software is the type of 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. These are the ingredients that will define success in today’s volatile, fast-changing markets.

[Mark Troselj is managing director for NetSuite in Asia Pacific and Japan]

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