Disruptions across the supply chain are inescapable. Different parts of the world have experienced supply chain disruptions at different times due to different reasons. These range from trade wars, natural disasters, major
supply failure, the pandemic, or most recently, the Russian-Ukrainian war. For instance, power shortages in
China affected large scale production, Brexit in the U.K., U.S trade embargoes on China, the Suez Canal
obstruction and the Russian invasion of Ukraine have all caused delays and bottlenecks across the globe. In a
recent Gartner survey, 76% of supply chain executives indicated that compared to a few years ago, their
company today is facing more frequent disruptions than previously.
The increasing complexity and length of international supply chains means that manufacturers and distributors need to look at a combination of tools and approaches to be more agile in every day and long-term challenges. With more reliable data from solutions like Enterprise Resource Planning (ERP) systems, industries can utilize data
analytics to foresee the disruption, comprehend its magnitude and impact on the supply chain, and formulate a
Here are some key supply chain challenges and how ERP supports businesses to gain the control they need in
their operations while increasing efficiency and overall customer satisfaction.
1. The challenge: Linear supply chain models
Many manufacturers and distributors have run a linear supply chain model. This means that when one factor
in the supply chain breaks, it has a snowball effect on the entire process. Business models have prioritized time
over flexibility, for example stock turns instead of safety stock. Streamlined approaches can cut down on costs
and increase efficiency during business-as-usual but are unable to deal with supply and demand shocks. When
global supply chains are disrupted, a stripped-out supply chain can leave factories unable to meet demand and
exacerbate an economic downturn.
The solution: Adopting supply and demand plans driven by real-time insights
The ability to forecast and manage supply and demand is critical for today’s global supply chains. An ERP
solution, that is integrated across the various functions of the business, allows manufacturers and distributors
to build their procurement requirements based on the forecasted demand in the system. With the help of the
right planning tools and predictive analytics, a business can ensure that they have the full picture as well as an
effective response to the risks faced. Tools built-in to an ERP system like performance and risk indicators often
improve decision making; companies can quickly respond to supply chain issues like adjusting the prices as per
the demand while moving extra products quickly to drive the revenue growth or expand the margins for a high
demand product with a limited supply.
2. The challenge: End-to-end supply chain visibility and transparency
Faced by global operations, and market expansions with stricter regulations, enterprises are being
overwhelmed by massive amounts of information coming from the different suppliers and customers. Along
with this, businesses often contain both internal silos – supply chain and procurement, for example – as well as external silos between companies and their supply network. Manufacturers and distributors often struggle with
visibility of raw materials into production, meaning they are unable to manage resources efficiently and
streamline production processes. Consequently, each moving part of the supply chain must be thoroughly
assessed and painstakingly monitored to ensure that the product is being brought to market with both speed
and effectiveness in mind. This is the manufacturing challenge but having insights across the supply chain can
help improve the whole business process.
The solution: Collaboration through a supply chain portal
Improving supply chain performance requires a single view, connected to the relevant systems and accurate
up-to-date data. This should also be accessible to all stakeholders. Data management and integration through a
portal or portal dashboard gives the organization much-needed visibility and control over all their supply chain
processes such as procurement, manufacturing, storage, and logistics. A supply chain portal also provides the
ability to engage, communicate and connect with colleagues, suppliers and customers while giving
manufacturers the control and agility they need to deliver on changing needs and demands, ensuring shelves
are stocked and ready to serve the market.
3. The challenge: Digitalization
Building a digitalization strategy requires support from top management to ensure collaboration and success
from transformation initiatives. The 2021 SYSPRO CFO 4.0 Survey reveals that 51% of manufacturing CFOs plan
to invest in machinery, robotics, and technology automation, and 61% believe that predictive models supported
by meaningful measurement and reporting are needed to ensure the business remains competitive. However,
factory leadership needs to set clearly defined strategies, goals and key performance indicators addressing
business specific pain points to ensure that the necessary return on investment is achieved.
The solution: A digital roadmap
Information in a digital format is the defining force within the supply chain. A connected supply chain driven by
smart technology such as automated warehousing, cargo tracking and remote fleet management is
transformative. To build more resilient supply chains, organizations should consider investing in technologies
that involve all stakeholders including internal teams, suppliers, trading partners and end customers. While ERP
is key to the digital transformation journey, organizations need a robust business strategy that underpins their
supply chain strategy. Change management also plays a crucial part in engaging the staff and ensuring that the
digital transformation efforts deliver the required results.
To drive customer satisfaction and business success, organizations need access to accurate, real-time, and
actionable data. A fully integrated ERP solution with embedded analytics is required by manufacturers and
distributors to tackle the immense challenges they face by optimizing their business operations, satisfying
customer demands, while increasing factory output. Without it, companies may remain in reactive mode. With
it however, there is competitive advantage with more control over business operations.