Leadership and team members at any company, regardless of size, know that ongoing pandemic-related supply chain imbalances are costly. Sales are up at many companies, but profit is down, primarily because higher transportation costs and delays are eating into profits.
Broken global supply chains won’t be fixed anytime soon, so what should companies do? There are three things companies can do now to address supply chain issues and improve their profitability.
Localize Operations
It may not be feasible or cost-effective for companies to relocate all of their physical locations, but in certain circumstances, the closer a company can be to its suppliers and/or customers, the better. Localization is effectively an “insurance policy” against supply chain disruptions and ever-increasing transportation costs. Localization also allows more efficient and predictable operations.
Utilize Digital Planning and Efficiency Tools
Digitalization is the process of connecting digitized information via digital tools, such as digital twins to transform business processes and create new opportunities for product innovation. Digitalization is affordable and widely available to help companies model, analyze and optimize the flow of operations. Digitalization can benefit any company — even older facilities can be optimized using digital tools.
Automate
Smart processes help companies analyze and utilize real-time data to optimize operations. Sensors, data collection, automation using robots and cobots, interactive internal and external communication, and other automation advantages can result in double-digit percentage improvements in efficiency and profitably.
In conclusion, the business world has changed forever, and those companies that are willing to step into the future by adopting modern technology and tools, will outperform their competition. https://www.automation.com/en-us/articles/july-2021/improving-operations-localization-solutions