May 02, 2023

Last year’s high inflation seemed to have discouraged many shoppers from finalizing purchases. At the end of 2022, inflation rates capped at 6.5% according to the U.S. Labor Department. Nevertheless, new reports highlight an output surge in manufacturing beginning in January. Recent data published by the Institute for Supply Management showed an increase in new orders despite raw material shortages and escalating prices, mostly thanks to government incentives and credit. With over a fifth of the American workforce still working from home, the demand for electronics and furniture – staples in manufacturing – has only increased. Despite the growth, 7 out of 10 manufacturers report experiencing heavy disruptions to their supply chains stemming from material shortages.

From semiconductor chips to textiles, lacking materials pose a great challenge to manufacturing plants receiving a large influx of orders. Consequently, many have increased safety stock quantities by adopting Just-in-Case inventory management models. To increase throughput rates while adapting to challenges, manufacturers stress the following three tactics:

1. Expand Supply Chain Communication

When dealing with shortages, proactive preparation is often more successful than sudden reactions. Therefore, manufacturers are investing in communication solutions such as push-to-talk and cellular networks to bridge communication gaps and provide real-time alerts concerning potential delays and recalls.

Within the manufacturing plant, updated WIPs and traceability systems shared amongst team members can show where finished goods are located, how many are expected to be produced, and how many are needed to meet forecasted goals. Inventory data and estimates are then shared with distributors and retailers as actionable insights.

2. Diversify Suppliers

Outside factors such as extreme weather and foreign politics can halt productivity, causing shortages, missed sales, and lost customer loyalty. About 90% of decision-makers say disruptions have become more frequent ever since the pandemic. To retain larger stock quantities, experts recommend segmenting suppliers across different regions.

Effective collaboration with multiple suppliers requires clear track and trace for individualized deliveries and parts. In other words, manual reporting will not suffice. Automated data capture solutions paired with durable enterprise labels and intelligent software register supplier deliveries and track segments accurately.  

3. Bring Production Closer to Distributors

From food production to aerospace, many industries are bringing manufacturing plants closer to the U.S., preventing high shipping costs and augmenting production control. While building manufacturing centers from the ground up can be expensive, many facilities are redesigning their space and technology solutions to leverage smaller spaces closer to their distributors and customers.

 When tailoring new technology systems, it is recommended that you first evaluate your space to uncover potential challenges such as thick walls, high ceilings, and metal interference. After a careful inspection, consider working with a technician team to scale communication and automation systems to fit your space for better inventory visibility.

One thing is certain: disruptions are sure to keep happening in the future. Therefore, manufacturing facilities have little time to waste on reactive inventory management systems. In addition to preparing workflows for sudden changes, new inventory models built with automated systems can help attract and retain workers. As we explore why new hires are interested in enterprise technologies, don’t hesitate to reach out to our modernization team to see how you can enhance throughput rates in your facility.