Business communities are still reeling from impact caused by the coronavirus (Covid-19) outbreak, be it a manufacturing, retail sector which may be having issues from raw material shortages, supply chain issue to service sector having challenges with skilled resources. 

These challenges will not go away in the near to medium term for the least. 

The shift on automated system will be from pure planning to prediction and planning for eventualities.  Automated systems on the factory floor keep production running smoothly and warehouses replenished just in time. But the biggest problem manufacturers are facing right now is supply chain disruption. 

How can ERP assist ?

Plan on shift in capacity. Whether it’s the need to dramatically increase production or have immediate shift of production from one plant to another overseas facility, manufacturers are under unprecedented pressure to make the most of their existing resources. Factory managers need better ways to maintain process visibility.  All of this points to the enormous potential of implementing more automation functions on the factory floor. 

Reliability of supply. Multi-vendor sourcing.  The coronavirus outbreak will have short- and long-term implications for manufacturers. Cost of shipping containers has increased from 2 to 4-fold, port clearance taking 3 months is not something out of the norm.  In the beginning, plant managers and planners focused on ensuring supply, but then they became more and more concerned, extending all the way to the constraints of the supply chain and the constraints that these constraints have on suppliers.  In the long run, manufacturers need to undertake an extensive due diligence process as they need to understand the risk exposures, including the operations of their suppliers’ sub-suppliers (upstream). To mitigate supply chain risk, what manufacturers need to do is that component sourcing should not be limited to one supplier, nor should they be limited to suppliers in one location. 

Plan and Predict. As a result, manufacturers, even those who have been relying on Excel or other simpler means to operate the business is looking at investing in a proper enterprise resource planning (ERP). While many ERP platforms include inventory control and supply chain management modules, many manufacturers are quick to realise the benefits of an ERP system such as Microsoft Dynamics 365 Business Central or Dynamics 365 Supply Chain where ready availability of planning and prediction capabilities are available, tapping seamlessly into the Microsoft Power Platform AI and analytics.  Supply chain orchestration requires software that goes beyond a system of record, It should provide risk analysis and simulation capabilities that allow manufacturers to understand and prepare for a hit to the supply chain. 

Balancing JIT with some safety stock.  Be adaptive.  The trend going forward will be in addressing the planning and constant adjustment via two supply chain streams.   A physical supply chain containing all products and a digital supply chain containing all information. By synchronizing these two supply chains with all manufacturing, distribution and procurement processes, companies will change.  Just in time, which has been exposed to caused production downtime when the upstream has unpredicted manufacture or supply issues.  This is where a hybrid approach is important for avoidance of unplanned down time. 

Is Industry 4.0 getting delayed? On the contrary, it is not.  Business planners will take the opportunity when upgrading or shifting of production facility globally or regionally to take advantage of the change and implement technologies of Industry 4.0.  So, all eyes are on automation (like robotics and Industrial Internet of Things (IoT) sensors) that make products go smoothly on the production line, for reliability, quality control whilst skills may be a challenge especially for the high-tech industries. 

In closing, the time is Now!   It is a not a matter of should I, but rather an issue in opportunity cost and repercussions in not implementing a unified ERP platform such as Microsoft Dynamics Business Central.   Implement a proper ERP system such as Microsoft Dynamics Business Central or Dynamics 365 Supply Chain will help a business with surviving and growth for the next 2, 3 or 10 years. 

Additional Reading –  

1. Strategies for success, coping with the auto semiconductor shortage – McKinsey https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/coping-with-the-auto-semiconductor-shortage-strategies-for-success 
2. A relook at supply chain strategy, – Fortune https://fortune.com/2022/05/16/shanghai-lockdown-end-june-china-supply-chain-bottleneck-2022/ 
3. Telsla Supply Chain issues and Lessons – https://supplychaingamechanger.com/drawing-lessons-from-teslas-supply-chain-issues/ 
4. Top 5 Manufacturing Challenges – Weidert Group https://www.weidert.com/blog/top-challenges-facing-manufacturers