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How Manufacturers Can Mitigate Supply Risks to Meet Changing Consumer Demands

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There’s been an evident sea-change in customer behaviours in recent years as niche or alternative segments of the consumer market have shifted into the mainstream.

Take the FMCG market, for example. Organic or plant-based foods that were previously found only in farmers’ markets or health stores now regularly appear in the supermarket deli; the craft beer that could once only be found at an enthusiasts’ fair is now in the drinks aisle. Even once-generic foods like coffee or chocolate now have an origin story all of their own.

The same trend is perforating other industries too, from clothing and home products through to the travel and energy sectors. The common denominator is simple; consumers are becoming more selective.

They want to know where the products they buy came from. Where and how the raw ingredients or materials were sourced. And whether efforts were taken to reduce the carbon footprint through actions such as local sourcing, or use of recyclable packaging instead of plastics.

As a consequence of this shift, it’s not uncommon now to see larger manufacturers facing strong competition from boutique brands that are better able to align with consumers’ self-identity and ethical principles.

For manufacturers, all this boils down to a new reality: competition is a given. The question now is not only how to adapt to expectations, but how to do so with speed and consistency. And, most importantly, at scale.

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Customised at Scale

Scale is indeed one of the biggest challenges today’s manufacturers encounter. The difference between a local manufacturer creating 100 SKUs a day for a geographically-contained customer base and a larger manufacturer producing 100 SKUs a minute for a national, regional or even international customer base are immense.

For the larger manufacturer, the ability to offer the same degree of customisation and care as the smaller producer must be part of their operating model. The flexibility and reliability of their supply chain is absolutely essential – a fluid supply chain leads to satisfied customers.

Here is how we’re seeing manufacturers reduce risk in their supply chain operations to serve customers at scale.

1. Sustainable Sourcing

It’s increasingly clear that customers are willing to pay more for quality. For large manufacturers, this has brought a rethink over the various facets of their supply chain. Buying from the cheapest supplier may present upfront efficiencies, but can lead to costs further down the line if that supply line is disrupted or proves unreliable. Seeking more localised and sustainable materials increases the consistency of the chain, while delivering on consumer demands for ethical sourcing.

2. Digitisation

The use of sensor-based technologies is one of the biggest shifts in recent manufacturing history. Once-static processes can now be transformed into dynamic supply chain operations, with tracking in place at every stage from sourcing individual components through to end-product delivery. In the past, it was not uncommon for this chain to be disrupted by unexpected bottlenecks, such as a shortage in a particular material or a haulage truck being held at customs. Now, with data analysis at a granular level, such risks can be identified earlier and backup measures can be put in place.

3. Adapting to Emerging Trends

It’s often said that consumers are fickle. The truth is, society is constantly changing, and individual attitudes and behaviours fluctuate as a result. Through modelling and analysis of sales data, manufacturers can identify new trends as they are emerging and adapt supply operations accordingly. Those who embrace machine learning and data science therefore stand to reap massive efficiencies and avoid the risk of running production lines long after demand has faded.

4. Connected Plant Operations

Global manufacturers commonly run production plants across multiple sites, both within key regions and around the globe. In the past, these operations often produced in silo. This approach missed a major opportunity to mitigate supply chain risk. With the flexibility of smart factory operations, manufacturers can now better coordinate production across these sites. If one plant is facing issues, such as shortages of materials or labour, production can be reallocated to another plant as a temporary measure.

5. Contextualisation of Data

As data becomes ubiquitous in manufacturing operations, one of the remaining challenges is relevance: delivering the right data, to the right person at the right time. The data that a manufacturing executive needs to see may be vastly different to what an engineer or plant safety manager requires. In order to reduce risk and improve decision-making, having the power to control how data is served up and contextualised for its intended recipient is vitally important.


Keeping the Customer Satisfied

Manufacturers operate under great uncertainty, seeking to manage the risks that exist on the supply side with societal and behavioural changes on the demand side. In a new era of increased digitisation, the manufacturers that are best able to join these two ends are those that have taken control of their supply chain operations and are resistant to unanticipated changes.

Being able to match what the consumer wants with what they can deliver – reliably, sustainably and at scale – can protect the business in even the most challenging of environments.

Phil Hadfield
Phil Hadfield
UK Country Director, Rockwell Automation
Phil joined Rockwell Automation in 2005 and has over 20 years of automation sales experience in multiple industries. He oversees the continued growth of Rockwell Automation products, solutions and services in the UK, and leads the continued expansion of The Connected Enterprise principles that help customers expand human possibility in the era of Industry 4.0. A registered STEM ambassador, Phil is passionate about enthusing the next generation of engineers, and has recently been engaged across EMEA in a strategic role relating to the company’s investment into PTC.

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