News, Insights and Best Practices for Manufacturing in Mexico

6 steps to a smarter supply chain in 2014

07 Feb 2014

Category: Logistics Management

The way businesses operate today requires an integrated approach to producing and distributing goods. Offshore manufacturing presents a number of opportunities for companies hoping to deliver the same high-quality products and services but with lower overhead costs. This is a main contributing factor for international companies that have decided to expand into Mexico. One key component for these enterprises is the supply chain and the extent to which barriers exist between production and getting commodities to the end market. However, the supply chain isn't monolithic and, instead, is a dynamic operation that affects the flow of international trade. In 2014, the number of variables impacting the supply chain has increased but there are steps that businesses can take to ensure they're developing an intelligent approach to manufacturing.

  1. Collaborate for sustainability
    According to a report produced by Accenture on behalf of the sustainability firm CDP, many suppliers have begun to recognize and respond to the need to reduce the environmental impact of supply chain initiatives. Continuing efforts from 2013, businesses can reduce their carbon footprint by collaborating with multiple suppliers. In fact, 427 different stakeholder projects resulted from suppliers and manufacturers cooperating to reduce carbon emissions, and they succeeded in removing 2.3 million metric tons from supply chain operations.
  2. Focus on customers
    Without surprise, manufacturers should also reflect heavily on the wants and needs of the consumers in their various markets. Gene Tyndall of Tompkins International told Supply Chain Digest that 2014 will be the year when customer experience takes a central role in how manufacturers operate.

    "We will see massive changes of operations strategies - which determine capabilities, business and operating models, customer experiences, and supply chain strategies - not just by retailers, and CPG companies, but by all businesses," explained Tyndel. "'Personalized Omnichannels' will dominate the supply chains going forward."

  3. Effectively manage talent
    In the meantime, making sure suppliers have the most capable workers in place to develop a smarter supply chain is a challenge facing many manufacturers. Dr. Paul Dittmann of Global Supply Chain Institute at the University of Tennessee indicated talent management is a high priority for companies. Although the supply chain functions largely in support of distributing products and goods across the globe, the individuals in charge of making sure orders are accurately filled and placed are crucial components of the larger frameworks. Without talented supply chain managers, manufacturers will likely have difficulty navigating complex systems or identifying more cost-effective alternatives to existing models.
  4. Understand capacity
    While manufacturers focus on developing and producing goods, transportation remains a key ingredient. Mike Regan of TranZact Technologies told Supply Chain Digest that the costs for shipping are likely going to increase in 2014 because demand for shipping partnerships will rise as the U.S. economy continues to improve. Regan commented if the U.S. GDP grows consistently at a rate of 2.5 percent or higher, there will be greater competition among companies looking to collaborate with trucking firms.
  5. Successfully integrate software
    From Oracle to SAP, there are a number of solutions out there for companies looking to implement enterprise resource planning software, Forbes reported. These tools have gotten more intuitive for users and some are even based on a social media-like platform that allows companies to respond to risk and obstacles in the supply chain more rapidly than before.
  6. Ensure supply chain visibility
    There's no question that the supply chain has grown more complex, although it doesn't necessarily have to be. Offshoring in Mexico gives manufacturers in North and South American, Asia and Europe the ability to better manage their supply chain because operations and distribution are so closely linked. 


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