Your business creates a product — but your job is not just manufacturing. The parts that make up this product have to be acquired, stored, transported, assembled, and shipped to where they’re needed on time and within budget. You must be exhausted.
And it’s not like you can ignore your supply chain and time-to-market strategies and hope for the best. After all, according to Deloitte, 79 percent of companies with high-performing supply chains achieve more revenue than their average competitors. In fact, the Logistics Bureau asserts that the supply chain is the least understood area of strategic business, generating up to 90 percent of overall business costs! If you’re looking for one area to focus your efforts at improving your business, supply chain management is one of your best bets. But it doesn’t have to be a gamble.
We’ve collected three examples of common problems businesses face with their supply chains and how they were addressed to maximize profit. Does any of this sound familiar to you?
The Seasonal Slumps
Many companies create products for which demand spikes at certain times of the year. Holiday-, weather-, and agriculture-based products, for example, are all extremely seasonal, which means that your time-to-market windows and supply chain demands fluctuate dramatically throughout the year, and anticipating these trends can be tricky, even with years of experience under your belt.
One company, which manufactures parts for agricultural machinery, worked to address this issue with Business Intelligence (BI) software. Rather than relying on instinct to manage their supply chain, they collected the data of spikes in product demand over the past decade and entered it into a BI solution. There, they could run the data through multiple analytical frameworks to try and discover new solutions.
One way they analyzed their data was through predictive analysis algorithms. The BI software, looking at the surges of demand over the past decade, was able to make educated guesses as to when future spikes would occur. This, combined with human experience, refined their production timetables and streamlined the supply chain.
Going one step further, the company was able to place this data visually alongside weather indexes from the past, as well. By mapping weather pattern changes alongside demand for agricultural machinery, they were able to even further pinpoint changes in demand for their product by utilizing multiple sources of data.
The Short Timeframe
Many products can only be stored for so long after production, which means that you can lose money on inventory if your supply chain isn’t optimized. One company, a manufacturer of tech supplies, needed to find way to ensure that their products were only stored for a short time before they were sold, and turned to BI software to discover solutions.
The answers they found allowed them to make incremental changes that provided monumental results. One of these solutions was to optimize their product testing by better calculating their throughput yield [consider linking to throughput yield blog here]. By monitoring what steps in their manufacturing process were most likely to result in mistakes, they could better pinpoint where in this process they should be testing. Overall, this reduced the amount of time it takes to test their product before it shipped, meaning that it could last longer in storage before it was no longer profitable.
Further, by collecting data on sales figures from their product vendors and visualizing that information in a BI dashboard, they were able to analyze product demand as related to region and its closest inventory supply levels, meaning they could increase or reduce the amount of inventory to more closely match what each store needed, cutting down on waste and maximizing sales.
The Best Laid Plans
When you picture your supply chain, is it something that your company intentionally and meticulously planned out? Or, like many businesses, is it something that grew out of organic growth and need over the years? For many, it’s the latter, which means that a simple analysis of your supply chain could allow you to dramatically cut costs. That was the case with a regional building supply manufacturer.
Most of their distribution process was muddied in a series of smaller supply chain agreements that met the needs of individual vendors as new contracts had been signed over time. By putting this data into a BI software and mapping product demand over time and location for all of their customers, they noticed that a lot of redundancies were occurring when it came to storing and shipping inventory. With a few simple solutions to streamline how they moved their products around, they were able to cut costs and increase their overall profit.
If you’d like to see how BI software could generate simple solutions to your complex problems, schedule a demo of Dyntell Bi, a cost-effective, cutting-edge BI program that will help you modernize and maximize your supply chain. Contact us.