Though the federal government lifted its COVID-19 emergency declarations on May 11, the effects of the global pandemic continue to plague individuals and organizations alike.
Supply chain issues still pose significant challenges for countless companies across numerous sectors. About 94% of the Fortune 100 are currently experiencing pandemic-related supply chain disruptions, and two-thirds of companies have suffered negative consequences on their businesses. Many organizations face rising costs, endless backlogs, shortened product lifecycles, costly noncompliance penalties, and massive material shortages.
From meat to microscopes, the pandemic has impacted the global stock of all goods. Manufacturing companies are bearing the brunt, and have no choice but to raise their prices for end customers, creating frustration and dissatisfaction.
However, in addition to supply chain woes, numerous internal issues only compound the material shortage problem.
Manufacturers must leverage advanced predictive analytics to identify the root causes of material shortage, uncover where materials are being lost or wasted, and pinpoint opportunities for improvement.
Identifying the Root Causes of Material Shortage
Besides the supply chain crisis, many internal culprits are responsible for material shortages in the manufacturing industry. These include:
- Poor production forecasting
- Wild demand fluctuations
- Insufficient inventory control
- Substandard materials management
- Excess material waste
Unfortunately, manufacturer employees are busy, and many lack the tools, time, and resources to identify these internal problems. They may take shortcuts to resolve issues in the short term temporarily. But scampering to apply bandaids leaves manufacturing organizations little time to seek sustainable solutions.
With data analytics software, manufacturing plants can rectify shortage-related challenges for the long haul, saving time and money. Predictive analytics for IIoT systems allow manufacturers to identify the root cause of material shortages by:
- Analyzing inventory management practices to identify areas for improvement
- Conducting audits to drastically reduce waste
- Identifying bottlenecks in the supply chain that may be contributing to material shortages
With manufacturing analytics, plants can also effortlessly implement strategies to maximize efficiency, mitigate potential concerns down the road, and decrease waste.
Implementing Effective Strategies for Decreased Waste
One of the top internal problems that causes shortages is that materials are being lost or wasted. However, manual approaches to reducing waste are time-consuming and prone to human errors.
To effectively combat this obstacle, manufacturers should leverage advanced data analytics to implement more efficient strategies, including:
- Developing leaner manufacturing processes: Data analytics promotes industrial automation, reducing the need for excess manpower. Without overseeing a massive workforce, manufacturers can operate more efficiently, concentrate on meeting consumer demands, and decrease waste in areas other than overall supplies.
- Improving quality control measures: Better quality control procedures reduce product defects and scrap materials, leading to less waste.
Executing recycling programs: Today, there is increased pressure for the manufacturing industry to be more sustainable. Manufacturers can rise to the occasion by implementing recycling programs and repurposing materials when possible. Data analytics can further support sustainability initiatives by decreasing the reliance on toxic materials, saving energy, and minimizing health hazards.
How to Leverage Data Analytics for Continuous Improvement
Manufacturers that embrace data analytics and machine learning can also identify opportunities for improvement, bolstering their material shortage resilience.
Manufacturers can do this by:
- Collecting data on inventory levels, production rates, and other key performance indicators to identify what is and isn’t working
- Utilizing predictive analytics to anticipate potential material shortages before they occur to prevent future production issues
- Continuously refining manufacturing processes based on insights gained from data analysis
- Constantly honing their strategies and processes, enabling manufacturers to ready themselves for the future
Collaborating with Suppliers
Maintaining supplier relationships is another way manufacturers can overcome material shortages. Plants can use data analytics to effectively monitor their suppliers’ real-time metrics and KPIs, gleaning a holistic view of their supply chain’s performance.
Armed with this data, manufacturers can:
- Improve communications with suppliers to ensure the timely delivery of materials
- Give suppliers access to a plant’s current inventory levels
- Collaborate on forecasting models to better predict demand and prevent shortages
- Control and track early deliveries that contribute to excess inventory and waste
Overcoming Material Shortages with Data Analytics
To overcome material shortages, it’s essential for manufacturers to understand both the internal and external factors contributing to the problem. Plants can leverage advanced analytics to reduce waste, deal with supply chain volatility, enhance supplier relationships, identify areas for improvement, and permanently resolve material shortages.
Proactive measures are imperative for maintaining efficient production processes and moving in the right direction. Data-centric solutions, including predictive analytics and automation, are crucial components to build and maintain resilience in the face of uncertainty.