Manufacturers, retailers, telecoms and utilities are dependent on their OEMs for raw materials and semi-finished goods. Supply chains have been severely disrupted and there is widespread uncertainty in supplies due to the COVID-19 pandemic. Orders are in complete disarray. The problem is more complex than previously imagined. For example, a manufacturer will know supplier lead times for raw materials, but there could be delays in transportation because of differing region-wise lockdown notifications; the manufacture could be classified by the government as an “essential service” and allowed to reopen the plant, but the supplier may fall in the “non-essential service” category, breaking the chain.
During disruptive events such as the worldwide emergency triggered by COVID-19, manufacturers need complete visibility into inventory, raw material, all open and pending sales orders, orders that require raw materials (which could be from more than one vendor) and the volume of each order that can be fulfilled, along with timelines.
A typical medium-sized plant would be shipping 200 to 300 orders every day. That’s 1,500 orders in 5 days. This is a large number and it is difficult for the manufacturer to go through each order, map it to raw material inventory and identify procurement dependencies and re-plan supplies.
The solution is a tool that analyzes orders, raw material inventory, delays in supplies, alternate vendors and their delivery timelines. This can be done in an Excel worksheet, which is normally the case. However, these are unprecedented times. The additional challenge is that an analytical task like this requires 4 or 5 people—who may not be available in times of distress like a pandemic. An automated tool (integrated with Oracle Cloud Supply Chain) could do the same work in a matter of hours if not minutes. The tool could also simulate all extenuating scenarios due to transportation delays and pinpoint orders affected along with the days of delay. Besides, it would take only one person to execute the analysis.
There are several other advantages of a tool of this kind:
- It enables accurate planning and scheduling of shop floor work
- Supply chain planners can prioritize high revenue orders
- Ability to accurately calculate suggested/ re-scheduled due dates
- Ability to send automated alerts to clients based on original/re-scheduled due dates
- No major transformation activities required
- Tool can be up and running in under 5 days
A supply chain tool that addresses inbound challenges and has the above capabilities is a must-have for planners. The tool would immediately reduce raw material risks and allow planners to invest the saved time and effort in locating alternate suppliers. For manufacturers, this is the right time to enhance their supply chain systems and analytics because the next disaster could be just around the corner.