Scaling Supply Chains
Scaling a business successfully is no easy undertaking, but it is especially challenging when it involves large physical assets. Take the production of industrial components and machinery, for example, which would include market segments such as agriculture, construction, aerospace and aviation, energy, and textiles. The total annual investment in industrial machinery exceeded $60 billion across six influential US markets, according to 2017 data made available by Statista. In other words, companies are funneling serious capital into industrial components and machinery.
Businesses aren’t the only places that rely on industrial components and machinery. Almost everyone in modern society depends on industrial components and machinery. Most agricultural farming equipment and household maintenance tools can be traced to industrial components and machinery. Automobiles and their internal combustion engines are clearly manufactured from industrial components and machinery. The same is true of all aircraft and the majority of construction hardware. Such objects are far from obscure. We see and interact with them on a regular basis.
Despite how commonplace those examples seem, the process of moving industrial components and the products of industrial machinery is far from simple. Jean-Paul Rodrigue, Ph.D., a professor of Transport Geography at Hofstra University, published a book describing how value chains can be affected by the integrity of its contributing suppliers. That’s a fairly intuitive takeaway. Unfortunately, establishing and managing a healthy supply chain usually takes significant time and effort.
Businesses that plan to do so should first consider some of the guidance already available. Jon Stevens at Supply Management shared three things leaders must know to build a strong supply chain. He highlights supplier and stakeholder relationships first and encourages leaders to foster them with care. Next comes the importance of building a sustainable supply chain well aligned with corporate citizenship. Stevens concludes by stressing the importance of having a robust risk management system driven by market intelligence.
It’s probably final piece of advice that most businesses struggle to realize. Those companies that use a fleet of transports might consider digitizing their infrastructure if they haven’t already. Attempting to scale a manual logistics and supply-chain management process is unlikely to yield positive outcomes. Things such as truck repair shop software can drive meaningful changes in otherwise seemingly intractable problems. And that’s just the beginning.
The promise of digital solutions was further emphasized by Forbes contributor Louis Columbus, who wrote about 10 ways big data is revolutionizing supply chain management. According to him, “big data is providing supplier networks with greater data accuracy, clarity, and insights, leading to more contextual intelligence across supply chains.” Most businesses cannot afford to ignore the advantages granted by software and big data. Those that do risk undermining their own growth and long-term success.
The bigger challenge is for those businesses willing to tap into software and big data. How do they actually use the data collected to drive insights? The right systems in place will ensure an abundance of data that can easily become overwhelming. The key is extracting as much value as possible while minimizing the invested time and resources. Alexander Block at Liaison Technologies composed a comprehensive guide on how to use data to improve supply chain operations. Readers should appreciate his rather detailed explanations. But none of the prescriptions will likely be easy for a business to implement. They are, however, imperative to scaling a healthy and sustainable supply chain over the long term. Experimentation is the best way to figure out which approach, tools, and/or processes might best achieve that goal.