If black swan events don’t make waves in the supply chain sector, businesses and consumers sure know how to make them on their own. From ongoing trade wars, raw materials scarcity, emerging markets and economic uncertainty – supply chains continue to navigate widespread uncertainty, whether they acknowledge it or not.
For many businesses, the environment has softened since the pandemic and most are eager to cut costs and get back on track with stable operations. But other manufacturers, the ones who recognize that deep-cutting disruption could strike again, are leaning into the slow down to make serious changes to their supply chain and find the sweet spot between cost and fragility.
One of the biggest changes happening in North America right now is the shift to Mexico in what is being called “nearshoring” or “friend-shoring”. From major railroad mergers and alliances, to increased border-crossing capacity, the race is on to ensure infrastructure is ready to support the shift of production from the Pacific.
But in a time where budgets are under so much scrutiny and top-line revenue walks a tightrope, conservative business practices can mean being left behind as your peers innovate. And without the right tools, eager businesses looking to make changes in their supply chain might find themselves in a sticky situation.
The following tactics are designed to give you the upper hand when making broad-sweeping changes to production, ensuring your business controls its own destiny.
As supply chains shift to North America, existing infrastructure will be tested. While a robust rail system, relaxed COVID-19 requirements and one of the densest dray regions in the continent will support growth, odds are freight will come quicker than capacity.
This poses a significant barrier to entry, as new regions require new providers, methods of shipping and documentation. A few tactics include:
Visibility is crucial for shipping flexibility. Last-minute changes, multimodal networks and new geographies and expectations can come with growing pains and major learning curves. Integrating your entire network into a standardized, centralized platform empowers your daily operators to cut through disparate communication channels and have more control as your business changes.
Whether your supply chain is doing a full-stop shift to a different region for production over the next few years or switching to a hybrid or China+1 (C+1) model, there’ll likely be a period of transition. With orders coming from multiple locations and being serviced by different providers, how can you be certain you’re providing the highest level of service to your customers and employees?
Your technology investments are critical in reining in complexity. If your current tech stack is ill-equipped to surface supply chain-related information to more than your logistics teams, you may be adding weight to an already burdensome time in your transformation project. Self-service tools allow internal teams to collaborate across their functions to tackle the most serious supply chain issues while improving their ability to be autonomous within their own role and avoid escalations.
Transformation projects, like nearshoring, are long-term strategies intended to generate stability for your supply chain. For many, the tradeoff with cost is worth it, as new efficiencies, lower transportation costs and shorter lead times can help offset lost savings on labor. However, the truth is that the intricacies involved with the shift to North America offer more room than ever for you to optimize your processes and maintain a lean budget.
When complexity is added to the equation – even temporarily – cost isn’t too far behind. But what if you could automate notifications across your supply chain when approaching avoidable costs, before they occur? And on top of that, what if you had the ability to optimize processes that generate significant reductions in cost without sacrificing operator efficiency? Visibility tools can help generate a continual stream of information – and recommendations – to ensure each move is the best.
Whether shifting production to North America is in the cards or your business is handling a supply chain transformation project on a smaller scale, having technology at your disposal is key. From improving your flexibility to reining in complexity and avoiding unnecessary costs, visibility tools are designed to take the guesswork out of the intelligent management of your supply chain. When people are given real-world impact analysis and a set of decisions and outcomes, you can be assured that each decision has your business’ best interest in mind.
Need help understanding how supply chain visibility can play a role in your forward-looking strategy? Contact your FourKites associate or reach us at [email protected]