How Canadian manufacturers can alleviate supply chain issues

• Industry Update

Click image to enlargeEven though restrictions related to COVID-19 ease across the country, many of the supply chain issues that we have experienced over the past two years continue. At its worst, this has left many companies completely unable to send or receive the goods they need, due to delayed shipments, unavailable products, and product price inflation – all due to a lack of availability.

By Shash Anand, VP of Product Strategy at SOTI

No industry has been harder hit by the effects of supply chain challenges than Canadian manufacturers, who rely heavily on the timely delivery of the materials they need to develop their own products at the price point that ensures profitability, and in turn, deliver them to their customers in a suitable time frame.

For manufacturers who have had their operations impacted by these issues, waiting for them to swing back in their favour isn’t an option. Recent research shows that delivery times and product prices are having significant consequences that must be addressed now.

The Impact of Delayed Deliveries

According to a recent report from SOTI, “From Clicks to Ships: Navigating the Global Supply Chain Crisis 2022 Report”, more than a third of Canadians (36%) are still experiencing much slower than usual delivery times. Many expect this to continue into the foreseeable future. According to a survey released earlier this month by Canadian Manufacturers & Exporters, more than half of Canadian manufacturers expect supply chain issues to continue until 2023, and another 18% feel they will last until 2024 or later.

But how have these delayed deliveries directly affected Canadian manufacturer’s operations?

Overall, 90% of Canadian manufacturers say they are still dealing with problems related to the supply chain and they have experienced reduced production and lost sales, according to that same survey released earlier this year. Specifically, as it relates to delayed shipments, 60% of survey respondents described the impact of delayed deliveries on their operations as “major”, with only 4% describing the impact as “minor” or “insignificant”; while 80% of Canadian manufacturers stated that supply chain issues have forced them to delay their customers’ orders. While the financial impact of this is tough to accurately calculate, the severe and negative impact of these issues on both the manufacturing process and customer experience is clear.

Unavailable Materials Causing Surging Prices

 The other major impact of the continued supply chain issues has been the price of materials and products, as the availability of those directly affects any price inflation purchasers may experience. Through SOTI’s own research, more than half of Canadians (55.9%) state that they will continue to experience increased prices on goods and see those prices rising even further in the future. But how severe have those issues been within the Canadian manufacturing industry specifically?

According to the survey, rising transportation costs, which is one of the biggest contributing factors to the price of materials and goods, was rated as the biggest bottleneck in their operations and the largest contributor to the negative issues affecting their operations. Access to raw materials and natural resources, ranked as the fifth most impactful bottleneck experience by Canadian manufacturers, has greatly affected the price of materials across the board. As prices continue to stay sky high, with a high probability that they will continue rising, it comes as no surprise that 80% of Canadian manufacturers surveyed stated that they have had to increase their own pricing to account for this, which has had negative effects on their relationships with their customers and is a key factor behind why so many manufacturers stated they have lost sales.

 Visibility into the Supply Chain is Key

 While there is no miracle fix to bring supply chains back into a state of normalcy, that does not mean manufacturers in Canada lack options that will help them gain greater visibility and insight into the supply chain, which supply chain experts agree is key. In fact, over 90% of supply chain executives say supply chain visibility is important to success, yet 33% believe they lack this visibility, according to a study from retail technology provider Alloy. Through the implementation of trackable mobile technology into the various key points of their supply chain, manufacturers can gain a much greater scope of visibility and insight into their supply chain and allow themselves to better schedule and plan their operations around any delays or other supply chain issues.

Mobile technology can help achieve supply chain visibility in a variety of ways, including:

Real-time data capturing: As data is created in your supply chain (e.g., when an item moves from a warehouse to a delivery truck), data must be collected and shared in real-time. By doing so, you can minimize bottlenecks and create new efficiencies.

Data communication: While capturing and sharing data in real-time is a key step, because that data often comes from so many different sources (your manufacturing facility, the warehouse your materials supplier uses, the truck delivering it, etc.), it is vital to ensure that disparate data is capable of “speaking to each other” to allow the various stakeholders to access and understand it.

Automation: Automation in your supply chain is key to creating new efficiencies that can ease the burden of the ongoing supply chain issues, and supply chain visibility can directly lead to automation. For example, when materials levels fall below certain thresholds, automated actions can take place to ensure your supplier is automatically alerted that a shipment is needed.

At a time where so much of manufacturers' operations have been significantly impacted due to delayed deliveries and unavailable materials, gaining a greater level of visibility into the supply chain to allow themselves to plan around delays and unavailable materials is invaluable. In fact, for Canadian manufacturers seeking to mitigate the impact on their customers both now and into an uncertain future, it is critical.

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As Vice-President of Product Strategy at SOTI, Shash Anand oversees the company’s evolution from a single product centered around Mobile Device Management (MDM) to an integrated platform that solves many of the challenges around enterprise mobility and IoT management.