Seven Rules to Supply Chain Success

Customodal Can Help Achieve Supply Chain Success

The United States is experiencing a manufacturing renaissance. Customodal can help your manufacturing company gain a competitive edge in supply chain logistics. Since 2008, U.S. manufacturing has rebounded significantly with help from rising overseas wages, improved domestic productivity, innovation, and the desire for shorter supply chains. Workers are in-demand, wages are rising, and vocational schools are attractive again.

While manufacturing once consisted primarily of large, vertically integrated-company with significant volumes, it has transformed into smaller companies with very different problems. Customodal has put together seven rules for supply chain success for small to medium size manufacturers:

Rule #1 – Diversify Customer Base

Complex supply chains tend to drive higher degrees of customization and sophistication between manufacturing partners.
The higher degree of interdependence brings the risk of over-reliance on one or two very large customers for small to medium manufacturers. To avoid over-dependence on a few customers, manufacturers need to increase their customer base, capabilities and service offerings.

Rule #2 – Be Lean

Lean manufacturing must be part of every manufacturer’s DNA. Part of the culture – not just a program. In the past, lean was a great way to save money and improve quality. Today, lean and continuous improvements are the price of admission for any manufacturer. If you don’t have a lean expert, consider hiring an outside company that will help you develop the right culture and processes.

Rule #3 – Automate Business Processes

Technology enables process improvement, but requires continuous investment. The investment is worth it, however, and guaranteed work and/or partnerships with customers can help mitigate the risk.

Rule #4 – Invest Smart

To stay competitive, manufacturers must invest in new technology (IT, CAD, automation, robotics, new tooling). The increasingly shorter lifecycle for products and technology, means the investments can be risky. To mitigate the risk of big investments, find customers who will guarantee work and or help with investment costs. Build relationships with companies that view your company as a strategic partner.

Rule #5 – Hire a Logistics Partner

Small to medium manufacturers with less sophisticated logistics strategy and execution than their network partners risk competitive disadvantage. Logistics is too important to ignore, yet most manufacturers today cannot afford to develop a world class shipping function. The investment in technology, know how and processes is too high. Better to outsource the function to a 3rd party logistics provider (3PL) that already has the technology, people, global networks and expertise. By hiring the right 3PL, manufacturers will save money and also gain an expert team that becomes a value-added extension of their team.

Rule #6 – Recruit, Train and Retain Top Talent

Changing demographics means fewer and fewer qualified workers to fill more technically demanding jobs. Traditionally, the manufacturing sector employed large numbers of unskilled employees. The sector has become more automated and fewer unskilled workers are needed.Increasingly, manufacturing requires skilled labor with expertise in controls, automation, controls, engineering, design and analysis.

Rule #7 – Develop a Supply Chain

Small to medium manufacturers can improve their service offerings and competitiveness by partnering with universities, technology and engineering companies. A great way to expand your capabilities and focus on what you do best is by outsourcing. Logistics, packaging, engineering, manufacturing and other operational specialities can be outsourced, often with cost savings.

To learn more, contact Customodal today!

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