Saving millions: How to prevent production downtime with a transparent supply chain
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Transparency in supply chains is more important than ever. Be it extreme weather, the Corona pandemic or the lack of cargo space – a wide variety of phenomena are currently exerting great pressure on the transport business. On top, production supply is suffering due to an additional lack of capacity in ocean freight and disruptions in downstream hinterland transport. It's time to digitize your supply chain management now to save millions and prevent production downtime.
Probably only a handful of Europeans would have been able to locate Yantian geographically before this summer – if they had even heard of this district of the 17 million Chinese metropolis Shenzhen. But the Yantian port became the focus of world news this July due to its temporary Corona-related closure. Every media user can probably also remember the Suez Canal obstruction this spring, caused by the grounding of the container ship „Ever Given”. Natural disasters such as the heavy rainfall in the west of Central Europe or the forest fires in the Southern part of the continent further disrupt the sensitively balanced equilibrium of the global division of labor and its transport needs.
The accumulation of exceptional situations, which has occurred or been increasingly perceived in this density not least since the beginning of the Corona pandemic, leads to viscous flows of goods. This applies not only to end products and their arrival at retailers or customers; the supply of factories with raw materials or semi-finished goods is also affected in many cases. For example, the ifo Institut, an economic research association at the University of Munich/Germany, reported at the beginning of August that nearly two-thirds of German industry is experiencing a shortage of materials. The situation is hardly different in other nations.
Cost trap: Production downtime
The connection between cross-border production supply and manufacturing processes is becoming apparent to a previously unknown extent in everyday life, because: Without raw materials or components, the assembly lines stand still. The automotive industry, which operates by means of just-in-time production, but also various other branches of industry, are currently feeling the effects of the half-ladder bottleneck. As a result, a renowned industry media outlet in the automotive world reported repeated shift cancellations and short-time work due to a lack of deliveries this year.
Production stops are, of course, significant cost drivers. Delayed deliveries to paying customers, as well as more difficult personnel management, cause expenses to rise in such phases in otherwise very precisely balanced contractual relationships between shipper, carrier and other potential service providers. The struggle for scarce transport capacity also puts additional pressure on the industry’s budget.
Need for holistic supply chain visibility
Logistics cannot solve all these problems, because where there are no goods available, nothing can be transported, and where there are no carriers available, nothing can be shipped. But a strong or, in the best case, completely digitized supply chain management helps to overcome the challenges by providing optimum transparency in transport movements. In this way, it is possible to identify at any time when components or materials arrive at the designated production facility. Furthermore, the resumption of production and the deployment of the necessary work force can be better controlled in this way.
Young digital companies like Synfioo offer their clients a complete solution in this area. The Potsdam-based start-up’s customers benefit from a significant knowledge advantage based on live location data for all modes of transport and historical information on specific traffic routes, as well as the resulting precise ETA prediction for transports that are usually eagerly awaited at their destination. In doing so, Synfioo focuses on a clear presentation of this important data and ensures a quick integration of the information into existing IT systems for transport track & trace or ERP processes. With this digital approach to establish greater transparency in supply chains, it is possible to take quick and decisive action even in exceptional situations.