Do you need to manage complex extended supply chains including collaboration with business partners, outsourcing and subcontracting?

In a big company, especially at the scale of enterprises, they need plenty of materials in order to manufacture the number of products targeted. Because of this, they encourage to utilize the extended supply chain. They have to collaborate with business partners, outsource, and subcontract other companies. Take Samsung for example, the South Korean mobile phone producing giant collaborates with business partners to supply the parts to be sent to the assembly line. Samsung chose to collaborate with the suppliers of the components because Samsung is unable to manufacture every single part needed by the phone all by them.

Why is it important to manage extended supply chain?

Taking an example from Samsung, they became successful because they managed the extended supply chain well. It is important for companies to manage the extended supply chain of their company because the companies they collaborate with may have valuable information about component stock control/estimate production strength from a few supporting companies, which will help them in making an analysis strategy to developing the products.

1. Change in trend

With the evolvement of trends from various demands of customers, the manufacturing company will indirectly adjust to the whole production line. For example, in recent years the automotive industry starts to manufacture smaller cars because of the shift in trend. People start to have smaller families so therefore they no longer require 7-seater cars. Because of that innovation, re-adjustments need to happen. As an example, the re-adjustments that need to happen are regarding design, component manufacture, component naming, component distribution, and monthly reporting by the finance team. This issue could also happen during the technological shift in cars to become fully battery powered.

If there are changes, no matter how small, it will impact the whole business process. Therefore, it is important for the company to have good collaboration with the suppliers’ party.

2. Stock Management

Other challenges that appear when managing a complex extended supply chain is complicated stock management. Imagine if creating a completed product needs collaboration from multiple suppliers. However, if all of the suppliers send thousands of items on the same day, therefore it would create warehouse overcapacity. This will give a bad impact on the company because the warehouse is very limited and must be utilized to the utmost efficiency.

Not to mention if the stock management is done manually. This will further complicate the company because of the lack of data connection between companies.

What is the system that could help solve the challenges of the companies while managing complex extended supply chains?

An ERP system could become a solution to resolve the pains that the company goes through while managing the complex extended supply chains. ERP is an integrated system that is able to track the production process from start to finish. It can also pre-plan the production process from budgeting, timeline, to what components must be ordered when.

Infor LN is the perfect ERP solution that is capable of answering the challenges while managing extended supply chains. With Infor LN, it is possible to integrate data and reports that make the company processes faster and more efficient. Also, Infor LN specializes in discrete manufacturing, with best practices of each industry, making it easy to implement and improves the company processes tremendously.

In conclusion, companies may face complexity in managing extended supply chains. The challenges may be in the form of coordinating with plenty of suppliers or difficulty in pre-planning the production process. However, the challenges are solvable with Infor LN, because Infor LN has the features of data integration, which simplifies communication with suppliers and pre-planning the production process. Infor LN will significantly help in managing complex extended supply chains.

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