Supply Chain: The Backbone of Business

In today's fast-changing market, the manufacturing supply chain is key in transforming raw materials into finished products. The wellbeing of the supply chain significantly impacts a business's efficiency and competitiveness by reducing lead times, cutting costs, and most importantly, enabling companies to adapt quickly to disruptions. By streamlining processes and building strong supplier relationships, businesses can enhance their operations and stay ahead of competitors, even in the face of unexpected challenges. 

The manufacturing supply chain offers more than just physical goods to customers. Any supply chain has three key components: procurement, production, and product distribution. Procurement involves the manufacturer obtaining raw materials and supplies from various vendors. This stage is about acquiring materials and finding a delicate balance between offering high-quality materials at a price that works for the customer. This balance is a critical challenge in the supply chain, as it supplies customers with high-quality products for their assemblies and generates a profit for the vendors. The next step, production, includes turning raw materials into sellable goods. This step typically accounts for a significant share of the supply chain, so businesses must take advantage any opportunities that offer improvement, such as improving assembly process or investing in more efficient equipment. However, product distribution, is the ultimate determinant of customer satisfaction. It involves shipping the finished products to their destination, including warehouses, retail locations, distributors, or direct customer delivery. Since this is typically the last step, slow processes and lagging supply chains can directly impact customer satisfaction and determine the difference between a repeat customer and an unsatisfactory customer.

Types of Supply Chain

There are four key types of supply chains, each playing a significant role depending on demand and when the product is needed. 

• The integrated make-to-stock model uses comprehensive data to forecast demand and produces inventory to match future demand, effectively preventing over- and understocks. 
• The continuous replenishment model is a lifeline for industries with stable demand. It keeps a set amount of stock on hand and produces enough to replenish the daily or weekly stock, ensuring that businesses can maintain production pace with current demand levels. 
• The built-to-order model is a strategy that waits to begin production until orders are received. It is primarily used for custom goods to minimize overproduction. This model offers the advantage of producing goods only when there is a confirmed demand, reducing the risk of excess inventory. However, it may need to respond faster to increases in demand because it has minimal on-hand inventory, which can be a challenge during peak demand periods. 
• Finally, the channel assembly model is a unique combination of built-to-order models and multiple workflows. It is ideal for goods with various pieces, such as computers with monitors and keyboards. This model allows for incremental assembly as every component arrives, reducing the need for large storage spaces. The product is shipped to customers when all pieces of the product have arrived, ensuring that customers receive a complete and functional product.

Current Challenges

The manufacturing supply chain faces significant challenges, headlined by global disruptions, rising raw material costs, and a shortage of skilled workers. Recent political tensions and lingering effects of the COVID-19 pandemic have caused delays and complications in the movement of goods across borders. Consequently, this limited availability causes the prices of raw materials to surge due to increased demand. This minimizes profit margins and forces manufacturers to rethink their sourcing strategies. Additionally, the manufacturing supply chain is facing a shortage of skilled labor, considering many manufacturing workers have retired or shifted industries, leaving a gap that employees struggle to fill. These factors force companies to innovate strategies to maintain a competitive edge.

In addition to these factors, the rising concern about sustainability places a greater emphasis on using sustainably sourced products and practices when choosing products. To combat this, companies must adopt practices to minimize carbon footprints, waste, and resilience on natural resources. These can help businesses reduce costs by extending machinery life and producing more goods with fewer resources.

Strategies for Supply Chain Optimization

Manufacturers can significantly improve supply chain operations by deploying cutting-edge technology in all three key components. This technological revolution is reshaping the industry, offering new ways to monitor stock levels, analyze supplier performance, and enhance productivity. By embracing these advancements, companies can stay at the forefront of supply chain management, ensuring efficient and competitive operations.

In the procurement stage, manufacturers can utilize technology to monitor real-time stock levels for supplies and electronically update the ordering process when stock levels fall below a certain quantity. Technology, such as enterprise resource planning (ERP) systems, can collect and analyze data on supplier performance, trends in pricing, and other valuable information that can improve this stage of the process. Manufacturers can swap automated robots into production workflows during the production phase to enhance productivity, reduce injuries, and create a smoother operation. Technology such as 3D printing is often used to improve quality control and reduce waste, especially for smaller batches or custom products that may require specific equipment. Finally, manufacturers can utilize technology in the product distribution stage. They can employ tools, including barcode scanners, picking robots, and mobile scanners, to improve accuracy and fulfillment times. After orders are picked and processed, transportation systems can optimize shipping routes and reduce costs. Once the goods are shipped, the company can track and update the status of the parts to provide customers with more accurate delivery updates.

Efficient supply chains offer significant advantages, from improving operational efficiency and competitiveness to reducing costs and waste. They enable companies to meet market demands, ensuring timely product availability and increased customer satisfaction. Moreover, they provide high-quality materials and products, meeting and even exceeding customer expectations. Lastly, they facilitate effective risk management strategies, ensuring smooth operations even in the face of disruptions. These benefits should inspire businesses to strive for efficiency in their supply chain management.

At PGC, we optimize our supply chain by maintaining strong relationships with a reliable list of suppliers, producing Berry-compliant products, and sourcing from suppliers within the United States. This approach allows us to speed up product receipt compared to importing materials across borders, significantly reducing lead times and improving our responsiveness to customer needs. 

Our commitment to quality control is strengthened by our close relationships with suppliers, enabling effective monitoring of standards and compliance. These strategic choices enhance our efficiency and align with our commitment to sustainability and community support, creating a flexible and accountable supply chain. Effective supply chain management is essential for navigating today's competitive manufacturing industry. By understanding these various supply chain models and applications, companies can better align their operations with market demands while remaining prepared for disruptions.