Using Technology to Achieve Agility in the Midst of Supply Chain Disruptions
Supply chain disruptions in the COVID-19 era have been top of mind for not just manufacturers, but everyone from vendors to consumers. Though the initial shutdowns of factories and ports due to the rapid spread of COVID occurred almost two years ago, their effects on the manufacturing industry and procurement activities are not only continuing, in some areas they are worsening. A recent analysis by the Federal Reserve Bank of New York showed that pressures on supply chains reached a new high in October 2021, surpassing every year’s levels going back to 1997.
Manufacturers are operating in extraordinarily challenging conditions. If they do nothing, they could find themselves facing significant business impacts. Staying agile, especially in an environment of heightened unpredictability, is the key to keeping your business running profitably and meeting customers’ expectations.
In this post, we walk you through ways manufacturers can achieve agility in a period of supply and procurement challenges—from diversifying sourcing and customers to using the power of cloud technology to increase your organization’s overall efficiency.
Steps to staying flexible and partnering smart
For manufactures around the world, widespread raw materials shortages, labor shortages, and transportation delays from pandemic shutdowns are wreaking havoc regardless of a business’s size. Among small businesses surveyed by the U.S. Census Bureau, more than 60% of manufacturers reported domestic supply chain disruptions as of July 2021. Even a large organization like Apple has reported up to $6 billion in lost revenue due to supply shortages and manufacturing delays. And this isn’t all manufacturers must cope with. Soaring prices, as much as a 7% increase before seasonal adjustment between December of 2020 and 2021, have added to the costs of manufacturers nationwide.
Though supply disruptions may make manufacturers feel at odds in preserving profits, there are actions you can take to protect your bottom line.
React quickly to demand disruptions. Just as auto manufacturers switched to producing ventilators after COVID-19 shut down their industry, flexibility allows businesses to respond to roadblocks when a source of income suddenly disappears or an opportunity rapidly surfaces. Instead of absorbing the burn of supply shortages or other changes in the marketplace, explore how you can apply your business’s skills to an alternative product. Being able to shift manufacturing when unexpected setbacks force you to adapt provides you with alternate sources of income. Whether it’s contracting with new suppliers or new customers, your contract process shouldn’t be the stumbling block to adapting.
Diversify suppliers. By expanding your vendor base, onshoring, and seeking digitally-advanced partners, you give your business room to pivot if one supplier faces supply chain disruptions. Now is a good time for manufacturers who have traditionally relied on international sourcing for their materials to look anew at the cost-benefit analysis of including domestic vendors in their supply channel to protect their business. Having contract technology in place to quickly negotiate and onboard suppliers gives you a leg up on your competition and helps to ensure a continuous flow of materials.
Empower your sales teams. The general rule is that no customer should comprise more than 70% of your profits. Especially in unpredictable markets, the trickle down risk effects can be a major customer cutting off orders at a moment's notice. To give your sales teams the tools to make your business less dependent on any one customer, provide them with the ease and speed of digital contracting. With digital contracting, your sales force gains the edge of moving fast against your competition, creating a wholly satisfying customer experience, and speeding time to revenue generation.
Tackling these strategies requires creative problem solving, but when paired with a powerful Industry 4.0 tool—cloud technology—you open your organization up to new opportunities to keep your operations running profitably.
How the cloud helps manufacturers solidify partnerships
Not only do major disruptions to your business call for strategic shifts, they also call for new tools that can support flexibility and promote greater efficiency. One of the fundamental places to begin with is your organization’s document management system. By implementing cloud solutions, manufacturers can take advantage of streamlined contract negotiations, paperwork processes, and data analysis.
Relative to the cost of new equipment and machinery on the factory floor, cloud solutions are typically much less expensive, and therefore an accessible way to introduce Industry 4.0 technologies such as automation and AI into the manufacturing process. With cloud-based technologies, you can quickly and easily automate manual tasks such as sending documents for approval and securely storing important contracts. When supply bottlenecks and procurement delays could cost you precious revenue and competitive footing, this automation not only reduces contract completion time but, by removing opportunities for human error, minimizes inefficiencies or mistakes that cost crucial funds.
As you transition to multi-source suppliers, cloud and AI technology make it easier to sign new vendor contracts by digitizing the contracting process. Fast implementation, intuitive interfaces, on-the-go signing—explore all that the cloud can do for your manufacturing business:
- Perform AI contract analysis to highlight risks and opportunities in vendor negotiations
- Fast-track vendor onboarding by automatically sharing procurement documents
- Mitigate risks through easier legal and compliance review
- Streamline document creation and retrieval with templates, archives, and data exports
- Enable vendors and customers to sign documents electronically on mobile devices from virtually anywhere
Meeting disruption challenges with DocuSign digital tools
As supply chain difficulties challenge activities in the manufacturing industry, cloud technology can increase flexibility and efficiency throughout your organization, whether your manufacturing is enterprise or SMB scale. Cloud-based solutions replace the weaknesses of ink-and-paper agreements with efficiency gains, a streamlined approval process, and fewer manual tasks. Your contract processes become easier and procurement more agile.
Today, the DocuSign suite of cloud products are a powerful resource for manufacturers trying to get ahead of supply bottlenecks, procurement obstacles, and customer onboarding. The cloud products at DocuSign expedite internal and external communications, minimize delays, and accelerate vendor and customer contract turnaround—all critical benefits in a world of supply chain disruption. As uncertainty about the future places more pressure on manufacturers’ ability to drive growth, a solution like DocuSign can have a tremendous impact in increasing agility and boosting optimization.
Learn more about how your organization could benefit from DocuSign products as you maneuver through this period of sourcing and supply chain challenges.