~ Why now is a good time reconsider your supply chain management ~
UK manufacturers seem to be busier than ever. The ongoing unpredictability of demand has caused many manufacturers to rethink their supply chains as they look to maximise capacity, productivity and efficiency in their production processes. Here Chris Billinge, business development director of supply chain specialist TFC, explains why 2022 might be a good time to change your supply chain management strategy.
As demand returned after the first lockdown, many industries boomed in their race to recovery, first from consumers and then the manufacturing supply chain across many industrial sectors. We saw growth in furniture manufacturing as people who had spent months at home began looking for an upgrade, unprecedented high demand for agricultural equipment and a continued record high manufacturing output for caravans and modular buildings. Sales of caravans grew by 20 per cent in 2021, according to a survey by MBH, which also found that one in ten people surveyed were planning to take a caravan holiday in the future.
One thing is clear. Supply chains across industries, all over the world, are stretched and challenged more than ever before. With supply chain issues, such as the global shortage of semiconductors and the blocking of the Suez Canal, regularly hitting the news, manufacturers are looking for ways to remain competitive, nail down their supply chain security and unlock growth as they enter 2022. One crucial step in achieving these things will be working with the right supply chain partners. The fragile nature of supply chains, coupled with skyrocketing demand means this year might just be the right time to change to TFC vendor managed inventory (VMI).
Ready for anything
A VMI solution safeguards your business both as it is performing now, and as you want it to in future, so long as it is managed with care, attention and the back-up of an extensive and global supply base. When choosing a VMI provider, it is important to balance global power and supply chain strength with a level of local supplier-customer intimacy that can flex and adapt to changing everyday needs. Too big and automated, and customers lose their identity and can be neglected. Too small, and the commercial reality of global sourcing overpowers and eliminates all commercial advantages. It is therefore critically important to invest time in building a relationship that enables a deep understanding of your own business needs and constructs the optimal VMI solution.
When evaluating VMI partners, look for providers that have a local presence, but are connected to a global network of suppliers. This way you can benefit from the best of both worlds — a strong relationship based on a solid understanding of the local market, backed by the supply chain security that a global company offers. Ask your provider how they create their VMI solutions to establish whether what you’re getting is unique to your business and that it has been adapted to your current situation. Is there a personality present or is it an organisation with no face?
One of the main reasons businesses don’t seek a new VMI provider is the fear of the unknown. In fact, the risks of changing to a new provider can be greatly outweighed by the reward, provided you are diligent in your conversations with your new partner. As a first step, you can ask for case studies or examples from other customers, for proof of what the company can deliver.
The right provider will take the time to reassure you and instil confidence in their service. By attending your site and talking to your production team, they can identify points for improvement, be it in the transportation of parts or stock management, and explain the hard and soft cost benefits you could achieve.
VMI is more than just a service — it is a partnership. Think of your VMI provider as being an extension of your business, involved from concept to completion and beyond. A good VMI partnership can deliver on-time production, smarter stockholding, a reduction in supply base and positive cash flow benefits.
With the right partner by your side, your business can focus on what really matters — productivity, capacity and people. If you’re looking to scale up your manufacturing in 2022, visit the TFC website — let’s work together.