Sikich can help you get ready to take better care of customers and benefit from digitized supply chain management in the cloud without unnecessary constraints and with greatly increased visibility. Here’s a look at what you should consider if you want to take supply chain management to the next level now.
Supply chain disruptions don’t often make it into the news unless a sudden shortage makes a common consumer product hard to get, like toilet paper early during the pandemic. But in recent weeks, widely reported delays and constraints in global supply chains have made it dramatically difficult to bring merchandise to its destination.
Hundreds of container ships are waiting to be unloaded at southern California ports. Because of a lack of containers and available vessels, agricultural products from the Pacific Northwest can’t be delivered to consumers in Asia. Shippers are adjusting their routes, causing additional delays and bloating expenses. Distributors, manufacturers, producers, and shippers are paying premium prices for containers and shipping capacity. Consumers and small businesses will see their costs go up or find that they simply cannot get certain goods from their current vendors.
These events should prompt almost every organization to reconsider where products, parts, and materials come from, anticipate what issues are to be expected—and think about ways to modernize supply chain management with greater nimbleness and less risk.
Anticipating digital supply chain in the cloud
At Sikich, our supply chain experts and many clients knew to expect supply chain turbulence at a not-too-distant time, although we didn’t anticipate how widespread it would be. Months ago, we held a webinar about supply chain resilience together with Microsoft to help businesses prepare for this. With fortuitous timing, Gartner analysts summarized some of the most important supply chain trends in a recent eBook called “Future of Supply Chain.”
Gartner finds that, while 24% of companies surveyed have some elements of a digital supply chain in place, only 1% operate with a completely digital ecosystem. However, 23% expect to get there as soon as 2025. Supply chain digitization can certainly give companies the visibility to respond quickly to sudden changes in demand or supply. Technologies like the internet of things (IoT) will more pervasively interconnect the elements of the supply chain and help companies act on real-time data.
Visibility is key
Many, very different Sikich clients are already using a cloud-based platform like Microsoft Dynamics 365 together with Power BI or other insight tools to achieve anytime visibility across their supply chain and operations. Microsoft is always evolving the solution. For example, new capabilities that will become available later this spring may help companies get closer to avoiding the kinds of supply chain disruptions that are so problematic for many businesses right now. To get customers and vendors on board with your cloud supply chain initiative, you will need to negotiate for the right permissions with them, but we can help you ensure that communications and information remain available and secure.
In many organizations, the drive for efficiency and cost reduction has introduced new risks by making processes so extremely lean that unforeseen events can easily shatter them. Sikich can help you find a healthy balance and address obstacles to internal visibility you might want to remove as you begin to shed more light onto the supply chain. Our consultants are experts at finding efficient ways to eliminate data silos that can prevent visibility.
Bringing business back home—or anywhere else
According to Gartner, 46% of supply chain leaders expect declines in globalization over the next five years, and 61% expect that offshore manufacturing will be reduced. You may take the lead in some of these transitions, for instance, by deciding to engage with regional vendors to avoid the costs and headaches of long-distance logistics. Or, availabilities may change and force an adjustment.
In any case, your management systems may need to adjust quickly, without being constrained by artificial limitations. When you run supply chain, vendor, and business management in a consolidated system in the cloud, that can be easy to accomplish. You can extend and adjust processes with minimal notice, no matter where people and business entities are. You can also stand up a vendor portal, like many organizations do, and simplify communications and transactions with your trading partners.
More opportunity for new services and ecommerce
When customers want to purchase directly from you instead of a major marketplace (like Amazon, Walmart or Wayfair), in the cloud you can set up your own ecommerce channel quickly, using secure, flexible software tools that you can finetune to your offerings and audiences. Gartner found that 69% of the supply chain leaders they surveyed expect that consumers will be less willing to visit physical stores and that 46% see product-to-service offerings as a critical new business model. That means you may need to think about selling online if you don’t do so yet, and customers may also expect you to get creative in designing services. Through your own ecommerce vehicle you may actually be able to reach many more prospects and customers, anywhere in the world, than you do currently.
There are many ways to get started on wrapping services around products. You can develop and refine your offerings in a low-risk manner, keeping close tabs to adjust the outcomes. If done right, this can help you be more profitable, more attractive to customers, and less subject to market fluctuations.
Data can drive services and fuel customer experiences
Some production-centric companies are newly embarking on parts distribution for industrial equipment or other products, reaching new ecommerce markets and harvesting new revenue. You need the right visibility and supply chain management tools to plan such an effort and make it worthwhile.
If you also offer complementary services, like maintenance and repair, you may want to take advantage of additional data sources. If IoT-connected, low-cost devices could tell you that installed equipment needs to be serviced so it doesn’t break down, you may be able to deliver great value to customers. They will probably prefer an affordable service contract to a disruptive outage of critical machinery.
Again, in the cloud, configuring the data streams and setting up the predictive analytics dashboards and reporting for an initiative like this does not need to be a major chore. Sikich has helped many distribution and manufacturing companies launch their new service offerings in the cloud on their Dynamics 365 platform, supported by insight and planning enabled by realtime information from all sources that matter. We can also help you turn up the sales and customer relationship management (CRM) capabilities in Dynamics 365 to deliver a high-quality customer experience that sets you apart from the also-rans.
Even without traveling, employees will be anywhere
Not surprisingly, 98% of the supply chain leaders Gartner heard from believe that working from home will increase over the coming five years. In talking with our clients, we find that some companies may look forward to once again having the ability to let people to meet face-to-face, but today’s remote-working practices are here to stay. Many companies and their employees feel strongly about reducing the costs and distractions of business travel while keeping people safe.
Conferencing and communications tools like Microsoft Teams allow people to meet and collaborate, no matter where they are, and they can share data and documents immediately and securely. Customers are certainly ready for this, too. Like Sikich, many organizations already manage all their customer interactions and commitments in the cloud—including product demos, using virtual or augmented reality environments that can be more lively, memorable, and practical than traditional presentations. Sikich teams even deliver entire Dynamics 365 and other software deployments in the cloud, using our own HEADSTART approach to keep projects on target and moving fast.
Keeping onsite workers safe and productive
Sales, the back office, marketing, and other functions in most distribution companies can happen remotely, but even in highly automated environments you will still have people working on the production floor and in warehouses. We agree with Gartner when analysts recommend that companies maintain a hybrid workforce for the long term.
In Dynamics 365 you can manage shop floor scheduling in such a way that workers are physically distant, but also get their jobs done. You can use Microsoft Power Apps to build applications which these safely distanced people can use on their individual, mobile devices or that help managers ensure that everybody is healthy.
What comes next?
Here are a couple of next steps in your supply chain journey:
- See what Sikich offers distribution companies.
- Get in touch with the Sikich team to explore how we can help you transform and modernize your supply chain management.
- Access the Gartner eBook, “Future of Supply Chain.”