Manufacturers are facing a number of issues from a political landscape that is increasingly volatile to new technologies from robotics and artificial intelligence and cyber threats.
According to a new survey from Grant Thornton, "The Future of Growth and the manufacturing Industry Report", companies that want to be competitive must adopt strategies to address the issues.
One area that needs to adapt to become more competitive is the supply chain. However, manufacturers have identified the following supply chain issues that are barriers to growth.
- 44% Supply chain complexity 44% and inefficiencies
- 41% Growing regulatory, tax and political uncertainty, such as the Organization for Economic Cooperation and Development’s (OECD's) Base Erosion and Profit Shifting tax plans, and Brexit
- 37% Effort required to manage defensive priorities, such as compliance
- 33% Inability to source digital talent and skills
- 19% Concern about ability to manage the tax implications of key growth strategies, such as acquisitions
- 15% Inability to find funding sources 15% and credit
- One of the ways to overcome these barriers is to build a digital supply chain. This new supply chain can answer concerns such as underused assets, high asset transportation and rework costs, and the inability to react quickly to unexpected risks, such as quality problems with a vendor half a world away.
Forward-thinking manufacturers are using technology advances — AI, advanced robotics, 3-D printing, prescriptive analytics — to improve the performance of their supply chains. By using 3-D printing, for example, companies can respond quickly to changing customer demands and shift production from factories offshore to sites closer to the customer base. Robots, meanwhile, can work on production lines alongside human workers.
However, it is the connectivity of an increasingly digital supply chain that will transform performance, the report points out. The digital supply chain allows manufacturers to capture data from sensors and connected assets, use advanced analytics and AI to extract insight from that data, run prescriptive analysis, and then provide that real-time information to operational leaders who can use it to optimize performance.
Improvements include better demand forecasting and automated inventory management, improved time to market, and lower-cost sources of raw materials.
“ The supply chain shifts from its traditional linear shape to becoming an intelligent, agile network that responds rapidly to fast-changing customer needs,” report says.