Manufacturing in Australia is big business, with the industry being made up of over 100,000 businesses, and employing almost one million Aussies. Regardless of what you're manufacturing, you rely on both domestic and global supply chains to provide the necessary materials to manufacture your way to profitability and meet customer demand.
Never before has there been greater strain and pressure on Australia's supply chain network, which is why you need to practice effective supply chain management. Let Waddle help you understand the current supply chain risks impacting Australia's manufacturers and how we can help your business overcome them.
Why is supply chain management important?
As a manufacturer, it's likely no secret to you why supply chain management (SCM) is crucial in your industry. Without demand or materials, you can't manufacture; and when you're not supplying manufactured goods, you're not making money. An organisation's supply is its lifeblood, which makes disruptions to the supply chain one of the most impactful challenges that manufacturing businesses face.
Good supply chain management starts with understanding the risks within the supply chain process. Having accurate information and supply chain transparency can not only save money, but it can also help your business produce or distribute only what you can sell. This means you can effectively eliminate unnecessary expenditure, reduce costs and increase revenue across your bottom line.
What's impacting supply chains?
The entire supply chain includes three main elements: Supply, Demand and Logistics. Currently, the world is facing disruption in all three areas of global supply chains. You may well think that the pandemic is to blame, and you're certainly close to the mark, however, there has been a perfect storm of disruptive events and factors that are continuing to wreak havoc on supply chain performance.
Let us help you understand what's impacting your supply chain management strategies:
The 'supply' element in the supply chain is actually made up of both manufacturers and their suppliers. A myriad of events that caused a global computer chip shortage has seriously affected manufacturing processes. On top of this, COVID-19's impact on factory staffing levels means factories can't produce at their usual rate and so meeting customer demand becomes increasingly difficult.
One of the pandemic's side effects has been an increase in working from home. The demand for computers and laptops certainly helped drive the demand for computer chips, which affected supply, but there has also been a huge demand for other consumer goods due to 'work from home' becoming the new normal for many Aussies. Increased consumer demand, particularly by way of online shopping also had a huge impact on logistics.
Somewhat arguably, the biggest disruption to supply chain processes was an upheaval in the worldwide logistics. COVID travel restrictions caused long waiting times and a lack of access for shipping vessels, globally. Not to mention the lack of shipping containers. In Australia, our logistics network felt the pinch of border closures and our truck drivers being struck down with COVID.
Managing supply chain in your business
Efficient supply chain management can be built into your business processes to make sure that you have a sturdy foundation to start tackling external risks from. Forming a business strategy is a great way to help combat known risk and is key if you want to build a competitive infrastructure and navigate complex supply chains.
One of the first supply chain activities in supply chain management is planning across the whole supply chain process. Supply chain strategies are built on understanding your organisation's supply chain and help build your supply chain infrastructure. Supply planning, demand planning and inventory management are all key requirements for a supply chain manager. Enterprise resource planning is typically a supply manager's forte.
Raw materials have been increasingly difficult to come by, so inventory management supply chain managers who work with their supply base have to stay incredibly agile and resourceful when it comes to supply chain risk management.
Source local suppliers & diversify
Managing inventory and achieving customer satisfaction is vital to your business's success. To do so, you need to build a strong supply network and manage supplier relationships. One of the ways you can mitigate logistical disruptions is by integrating suppliers who are local to your area. Conduct your market research and look for distribution centres closer to you, so that they can deliver goods with less chance of being held up.
You can also apply diversification to your supply chain management approach. Keeping a range of different suppliers and distributions lowers your supply chain risk, in the event that one experiences issues.
Meeting your customer needs could mean looking at your entire process, and potentially accessing suppliers overseas. Operations management within manufacturing businesses often utilises contract manufacturers as part of their supply chain management, which is also an option. Typically, you'll find global suppliers offer competitive prices.
Having a strong network of supply chain partners can be one of your secret weapons to achieving supply chain management success.
Have you considered using invoice financing as part of your business' supply chain strategy to gain a competitive advantage and boost customer satisfaction? Make supplier payments with ease, access better material flow and take advantage of opportunities to refine your supply management by unlocking the money tied up in outstanding invoices.
You can access up to 85% of the total outstanding invoice amount through Waddle's innovative invoice financing solution to elevate your manufacturing business' supply chain management.
Supply chain disruptions don't need to bring your manufacturing business to a halt. Contact the team at Waddle today to find out how unlocking the money tied up in your invoices can be one of the links in managing your supply chain.