With the right technology, process manufacturing strategy, planning, and management can be simplified.
Key Takeaways:
- Process manufacturers have unique challenges that require accurate forecasting
- These challenges can be turned into opportunities by adopting technology that makes process manufacturing planning more accurate
- Real-time actionable business intelligence is imperative to keep pace with demand without creating inventory surplus
- With increased globalization and changing politics, keeping compliant with regulations is imperative to avoid further supply chain disruption
- Cybersecurity issues are looming large as 50% of manufacturers said they suffered a data breach in 2019, and intellectual property is becoming increasingly valuable
- Traceability has always been important, but increasing pressure from consumers means accurate tracing of the entire supply chain is imperative
Manufacturers have been through a trial by fire with supply chain disruptions and changes in demand during the past two years. Process manufacturers in particular, with their reliance on a consistent ingredient mix, have unique challenges that require accurate forecasting to keep up with manufacturing demand.
Process manufacturing companies — such as those in the packaging, specialty chemicals, and rolled and woven goods sectors — are dealing with overcapacity as well as price pressures and continuing supply chain uncertainties. They are coming to the realization that they must innovate and build resilience for whatever might come next.
To optimize throughput and capacity utilization, process manufacturers must effectively manage inventory, apply predictive analytics, and gain supply chain transparency through digital transformation. Let’s look at some common challenges and tips on how to turn them into opportunities that keep your machines fed and operating efficiently today while preparing your company for a brighter future.
4 Digital Solutions That Address the Top Challenges for Process Manufacturers
Process manufacturers face pressures to reduce costs, continuously update and improve product formulas, contribute to supply chain efficiencies, comply with new legal and regulatory requirements, delight their customers, and more — all while simultaneously streamlining operations and working to improve their position in a highly competitive market.
The right technology solution can help your business through the use of intuitive algorithms and analytics that help future-proof the crucial elements of supply chain management: integration, operations, purchasing, and distribution.
Here are solutions to the top challenges facing process manufacturers according to a recent, comprehensive survey:
1. Real-time, actionable business intelligence for process manufacturing planning and production
Is inventory keeping up with demand? What seasonal factors affect your business? How much of a particular ingredient do you really need? Why is there a surplus of ingredient X?
You can’t afford to use guesswork. Predictive analytics uses artificial intelligence tools that provide not only real-time data but historical information as well. This information can be used to predict critical future outcomes, reduce risk, streamline operations, cut costs, manage inventory, and increase revenue.
Manufacturing planning and optimization allows process manufacturers to create long-term capacity plans as well as short-term detailed schedules that increase production throughput, respect constraints, optimize changeovers, lower material inventory, and shorten cycle times.
Here’s what you get from these solutions:
- Real-time visibility with multi-echelon, cross-organizational planning support to create and revise your plans based on real-world, real-time visibility of demand and inventory.
- Granular forecasting at the SKU level.
- Holistic inventory management across your multi-echelon network to maximize service while optimizing cost. In addition, the right digital solution helps boost facility productivity, manage performance, and reduce risk.
2. Complete regulatory compliance
More than 80% of process manufacturers worldwide say their strategic plans are being affected by import and export changes. Regulatory turbulence created by Brexit and US trade and tax policies is having a big impact on real-time business planning according to one-third of respondents.
Existing supply chain disruptions aside, if your products don’t meet regulatory requirements, you are taking huge risks. It’s not about what happens just in your facility; those requirements include compliance all the way down the supply chain, including all suppliers and other third parties.
Therefore, your digital platform should include:
- Support for the creation and maintenance of comprehensive vendor profiles that include any required certification
- The ability to manage important government-mandated compliance regulations, such as Conflict Minerals, REACH, Restricted Substances lists, Prop 65, and more.
Compliance management is an important part of risk management. Make sure you have this essential layer of protection.
3. Cybersecurity protection
The statistics are alarming: ransomware attacks in the manufacturing sector increased 156% between the first quarters of 2019 and 2020. Phishing is also a huge problem.
Digital attackers can use these threats to steal data and compromise a manufacturer’s customer database. This information can then be used to attempt additional attacks or get a foothold in your network and leveraged by bad actors to compromise your manufacturing processes.
In addition, the loss of intellectual property in a competitive market can be devastating. The most serious risk comes from low-cost regions, particularly from countries with weak intellectual property laws.
Significantly, 50% of manufacturers reported they suffered data breaches in 2019. The global pandemic and the necessity to work from home have only increased these risks. This makes it more important than ever to make sure your digital supply chain platform has a reliable and secure environment.
4. Traceability
Almost all process manufacturers (90%) say they have faced risks due to poor supply chain visibility, with concerns about keeping brand value and meeting regulatory requirements.
A global supply chain means emerging markets for goods and services. This offers the opportunity to reduce costs, but these collaborations with new, geographically dispersed partners require careful monitoring of all touchpoints. It’s imperative for process manufacturers to document the chain of custody from the sources of the materials to the importer of record.
Traceability carries three important benefits:
- Increases supply chain visibility
- Boosts quality control
- Reduces risk
Keeping a record of the entire production and distribution history means your suppliers can react quickly to any issues. Your digital platform must ensure traceability and provide the ability to scale across the evolving supply chain.
Process Manufacturing Planning is Easy with Logility
Efficient process manufacturing planning isn’t simple. It’s composed of many parts, large sets of data, and fraught with situations that can cost anything from revenue to profits to human life. To remain competitive and problem-free, embrace the technology that will give you resilience, compliance, traceability, security, and sustainability as well as the data and analytics you need to develop a sound strategy.
Logility’s AI-based supply chain planning solutions drive more accurate demand plans, target markets, and product life cycles, all while improving longer-term predictions for new products, phase-outs, and short-life-cycle products.
Want to know how to manage disruption and improve productivity within the manufacturing industry? Get some answers in this blog post.
