Supply chain trends in the world of engineering and manufacturing

The worlds of engineering and manufacturing are taking a step back to reevaluate supply chain practices. Deutsche Post DHL Group recently released a whitepaper that found the engineering and manufacturing sectors are revamping to better suit future market conditions.

The paper found that supply chain management plays a key role in successful business models. As such, DHL set out to report on supply chain trends that need to and will be integrated into supply chain practices of the future.

Many organizations have already begun this transformation, with an increased focus on becoming more customer-focused and competitive.

"Generally speaking, we expect that supply chain managers will have to deal with even higher complexity in the future", explained President of DHL Engineering and Manufacturing Reg Kenney. "Customers will expect a broader, more customized product portfolio. In combination with shifting growth markets, thus more suppliers, a lack of qualified workforce and new technologies, this will have companies rethink their current supply chain models."

Key trends in engineering and manufacturing supply chains
While DHL released a whitepaper on the matter, its researchers are certainly not the only subject matter experts with opinions on the subject. Engineering and manufacturing is a huge sector. DHL noted that this industry alone accounts for 14 percent of global employment, 17 percent of worldwide GDP and "70 percent of the entire global trade volume stems from manufacturing companies."

As such, we have added some key insights from CIO contributor Raman Mehta, who is a member of the executive management team at East West Industrial Engineering Co Inc. Here are the top six supply chain trends in the engineering and manufacturing industries.

  • Sustainability: According to the DHL whitepaper, today there is more attention than ever paid to stakeholder value. Increasingly, stakeholders are looking to the sustainability practices of companies due to consumer demand for climate-sensitive supply chain practices and sourcing. DHL noted that implementing energy-efficient tactics as well as levels of increased transparency will be a key trend for success within engineering and manufacturing supply chains.
  • Internet of Things (IoT): Both Mehta and DHL point directly to technology when looking to future trends in these supply chains. Mehta explained that IoT can help companies and their supply chains on a variety of levels, from predictive features that map out customer demand to real-time visibility of product and service. "In a global supply chain, strategic deployment of IoT technologies can improve asset utilization, customer service, working capital deployment, waste reduction and sustainability," argued Mehta. DHL echoed this notion, noting that utilizing IoT will help companies stay competitive by helping with supply chain management on every level.
  • Resilience: DHL takes climate change and it's volatile consequences into consideration when looking forward.  Engineering and manufacturing companies and their supply chains will need to become more durable. This will require ample levels of disaster planning with an emphasis on strategic sourcing. E&M companies should be well-equipped to handle sudden disruptions in supply chain functions.
  • Strategically-distributed manufacturing: Mehta noted that there have been many discussions surrounding sourcing methods. Should E&M companies partake in strategic outsourcing for manufacturing needs or bring the efforts in-house? Mehta says the trend is toward the former. Strategic outsourcing provides companies with a bunch of benefits. From flexibility to cost reduction all the way up to speedier product development, Mehta definitively declared strategically-distributed manufacturing to be the leading inclination.
  • Integrated supply chainsThere will be a future trend toward more integrated supply chains, argued the DHL whitepaper. Companies should look to closely analyze supply chain data in order to better connect the chains from end to end. By doing this, businesses would see an improvement in collaboration processes across different stages of production and distribution.
  • Additive Manufacturing (AM): Mehta described this trend as a potential game-changer for the world of manufacturing. AM allows businesses to make objects from 3D model data. The process involves layering where materials are joined together. This differs from traditional methods because it adds to existing structures to create the desired shapes as opposed to subtracting. The AM process generally produces less waste and allows for the use of less material, explained Mehta. The trend toward this process could mean more efficient manufacturing, both in terms of finances and production techniques.
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