The ongoing issues of shipping backlogs, low inventories, labor shortages, and escalating backlash from a global pandemic continue to impact America’s manufacturing supply chain. Small to mid-sized companies and suppliers don’t have the luxury to “wait and see” as they continue to feel the impact of supply chain disruptors. Automation is one way that companies are attacking America’s broken supply chain.
Simply put, a supply chain is the system that allows products to get from where they are made to where they are sold. In recent years, particularly since the COVID-19 pandemic surfaced in early 2020, that system has been broken on an epic scale—leading to massive shortages of many manufacturing materials and products. The pandemic shutdowns disrupted movement of raw materials and finished goods, slamming American manufacturers.
Production slowed, demand for products increased, availability of shipping containers was strained, and freight charges skyrocketed.
American companies have seen drastic threats to their bottom lines, causing much more complex inflationary pressures due to higher prices and lower availability. As manufacturers try to solve the supply chain challenges, resiliency has become a top priority and companies look to automation to fight against the many supply chain disruptors.
Top Supply Chain Disruptors
Supply chain imbalances created bottlenecks in the system’s logistic infrastructure. These are some of the main disruptors that have led to America’s broken supply chain.
1. COVID-19 Pandemic.
Companies still have not recovered from the upturn in international supply chains caused by the global pandemic. Supply shortages continue even three years later.
2. Labor Shortages.
Supply chains were affected by lack of shipping crews, delivery workers, and long-haul truckers. Employee shortages have affected more than just transportation and logistics. Many organizations reported early retirements and aging workforce as clear supply chain challenges.
3. Geopolitical Changes and Conflicts.
The war in Ukraine disrupted major shipping lanes while output from Chinese manufacturers have dwindled. Global energy shortages also impact manufacturing capabilities, forcing some plants to operate at a reduced capacity.
4. Overexposure to Economic Shock.
Lean manufacturing models like “just-in-time” inventory systems keep costs low but require a high level of coordination and accuracy among suppliers.
5. Freight and Shipping Challenges.
Labor shortages, declining wages, poor job quality, and subpar infrastructure contribute significantly to supply chain disruptions. In addition, the shortage of shipping containers and the equipment needed to move them combined with higher fuel costs continue to cause supply chain bottlenecks.
6. Supply and Demand Volatility.
Restricted business and consumer activity during the pandemic led to unprecedented layoffs and resignations. And without sufficient labor, manufacturers continue to have trouble meeting customer demand. Shifts in consumer activity fueled this disruption.
7. Spare Parts and Components Shortages.
As parts and components became difficult to deliver, American manufacturers have been forced to raise prices, reduce production, and close factories.
How Automation Helps Solve the Broken Supply Chain
Managing these challenges requires risk management strategies and new technology that optimize production and minimize further supply chain risk. At the core of manufacturing business success is effective supply chain management. A comprehensive supply chain strategy requires visibility, reliability, and predictability.
One solution is implementing sophisticated, but easy-to-use digital technology that collects, analyzes, interprets, and manages high-quality, up-to-the-minute data. The data supports the automation and forecasting tools necessary for effective supply chain management.
Data-based RFID technology offers a new generation of eCommerce that digitizes onsite inventory—turning any inventory storage area into a virtual vending machine that can drive replenishment orders directly into the supplier’s ERP and the consumer’s MRP systems.
This technology establishes a solid data foundation for future automation (like smart contracts, online blockchain ledgers that automate B2B documents like packing slips, receiving reconciliations, purchase orders, invoices, payables and receivables, and even out-of-the-box payments, like bitcoin).
RFID technology is a simple solution to automate physical inventory supply chains that also provides an established foundation for a new approach to eCommerce. The system digitizes physical inventory consumption and uses that data to automate every aspect of the supply chain, regardless of complexity.
The Cloud-Based ShelfAware Inventory Management Solution
ShelfAware is revolutionizing supply chain management through the power of collaboration. Independent suppliers work together with a single consumer on a single RFID IoT supply chain platform.
Thanks to its unique use of Cloud SourcingTM, ShelfAware is a great fit for any business trying to remotely manage a complex physical inventory. More specifically, ShelfAware was designed to automate industrial wholesale supply chains and provide a platform for independent industrial suppliers to collaborate and collectively supply the industry’s largest consumers on an automated omni-channel.
t to learn more about an affordable way to automate your supply chain? Request your free ShelfAware demo
Too good to be true? ShelfAware is redefining the vendor-managed inventory industry. For this reason, we’re happy to talk to you about how our intelligent inventory platform can benefit your business. Contact us today for more information.
More articles about using a digital vendor managed inventory system to solve your supply chain challenges:
How Supply Chain Automation Gives Your Company a Competitive Edge
Everything You Need to Know About Digital Vendor Managed Inventory
Why Cloud SourcingTM is a Game Changer for Digital VMI Systems
How Energy Manufacturing Tackled Inventory Challenges with an Affordable, Easy-to-Use Supply Chain Solution
What Kinds of Manufacturing Businesses Can Benefit from Inventory Management Software?
Top 10 Advantages of RFID Inventory Tracking
7 Ways to Save Time and Money with an RFID Inventory Management System
How Automation Improves Manufacturing Operational Efficiency