A version of this article has been published in Forbes, contributed by Yoav Kutner, CEO and Co-Founder of Oro Inc.
Every manufacturer knows that relying on a single vendor is a dangerous practice. If the supplier fails to ship a product, the entire operation can come to a halt. With China closed for several months, companies quickly realized how important diversification is for their B2B supply chains.
But just knowing there are alternative suppliers doesn’t mean that they will meet the requirements of your business. After all, you must vet them for ISO certification, regulatory compliance, and QA/QC mandates. At the same time, alternative suppliers must understand your product or operation to be able to deliver the necessary items on time.
And while a great deal of support has been allocated to production reshoring in North America, it’ll take time to see the results. New manufacturing plants, distribution centers, and warehousing operations are challenging to set up. For example, a new microchip factory in the U.S. will likely take several years to go live.
So how can manufacturers respond to these challenges?
One way is with the help of advanced technology planning. This approach enables businesses to anticipate issues before they create long-term bottlenecks. For example, companies can set up a trigger mechanism alerting operations managers when a part is out of stock or unavailable from the preferred supplier.
Essentially, advanced planning integrates different supply chain elements and uses advanced algorithms for supply chain forecasting, considering demand, capacity constraints, and material availability.
The more data you can feed into advanced algorithms, the easier it will be to visualize where help is most needed. Ultimately, advanced technology planning enables businesses to perform corrective actions, driving continuous process improvement.
