Supply Chain Woes

Over the past two decades, many manufacturing operations have moved offshore to lower operating costs. No one could have foreseen the recent COVID-19 pandemic that brought the world’s economy to a grinding halt. Pandemic-related problems exposed gaps in various supply chains across the globe. Pharmaceutical companies that had pivoted operations found themselves scrambling to get their hands on raw materials and pre-fabricated components when their suppliers worked out how to operate safely.

Transportation problems, safety concerns, government-imposed quarantines and other barriers threaten supply chains worldwide.

While all industries—and most companies—were severely impacted, business sectors considered critical were the hardest hit.

What is a Critical Industry?

“There are 16 critical infrastructure sectors whose assets, systems, and networks, whether physical or virtual, are considered so vital to the United States that their incapacitation or destruction would have a debilitating effect on security, national economic security, national public health or safety, or any combination thereof,” according to the U.S. Cybersecurity & Infrastructure Security Agency.

Critical Infrastructure is identified as functions that are essential for the functioning of a society and economy. Since 2001, the National Infrastructure Protection Plan (NIPP) lists 16 Critical Infrastructure Industries as essential to keep our country and economy moving. These industries are:

  • Chemical
  • Commercial facilities
  • Communications
  • Critical manufacturing
  • Dams
  • Defense industrial bases
  • Emergency services
  • Energy
  • Financial services
  • Food and agriculture
  • Government facilities
  • Healthcare and public health
  • Information technology
  • Nuclear reactors, materials, waste
  • Transportation systems
  • Water and wastewater systems

Understanding your Supply Chain

A robust supply chain is the foundation of any successful company. A supply chain’s importance is magnified when critical operations rely on getting raw materials in the door and finished products to customers on time. An efficient supply chain is essential for daily operations.

The impact that COVID has had on supply chains around the world has taught businesses that:

  • Raw material supplier relationships are essential
  • There are still massive transportation industry constraints
  • Security issues in the supply chain can lead to unexpected challenges

According to the Information and Communications Technology’s (ICT) Supply Chain Risk Management program, knowing your immediate supply chain and an extended one that may not have direct access to third-party suppliers is essential.

Materials once considered abundant can quickly become scarce when multiple businesses compete for them. This is where a good supplier relationship makes a difference between getting access to a product or waiting until more materials are produced.

Another part of existing supply chain woes is that while companies focus on getting goods flowing, data breaches and other security problems are rising. According to the Risk Ledger Report, third-party app developers, payment processors and remote worker infrastructure are among the top security threats.

Figure: 1Functions enabling modern supply chain management

Functions enabling modern supply chain management

Ways to Stay Ahead

Thankfully, there are a number of solutions out there to help companies stay competitive. The latest version of Microsoft Dynamics 365 for Supply Chain Management not only includes several features for building strong supplier relationships and minimizing risks, but also retains a familiar look and feel to other Microsoft Office products. This familiar interface helps with change management and reducing training needed to get up and running.

Some of D365 Supply Chain Management’s more powerful features include:

  • A Role-based Vendor Collaboration Portal
    Members of the procurement team can post and respond to Requests for Quotations (RFQ) and edit company information. Companies and suppliers can confirm, maintain, reject and accept purchase orders.
  • Purchase Inquiry Options
    This option is available outside of the portal. It provides an alternative to the RFQ process when immediate material pricing and delivery need to be met with your existing supply base.
  • Vendor Performance Analysis
    Includes a dashboard to real-time Spend Analysis and Vendor Performance insights into on-time delivery.

Talk with us today to learn more about enhancing your supply chain capabilities.

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As a way to further help the manufacturing industry, Microsoft debuted its Dynamics 365 Manufacturing Accelerator on May 14, 2020. The Manufacturing Accelerator is a Power App offering an enhanced Supplier Relationship Management experience. It runs within Dynamics 365 Supply Chain Management.

Primary features include processes to:

  • Qualify new suppliers
  • Onboard a supplier for data integration
  • Manage and track Supplier Relationship Health Data

While the accelerator was being developed before the recent pandemic, it’s become a great asset to procurement teams looking to strengthen their supplier sourcing capabilities.

Final Thoughts

Companies today are still struggling with two competing priorities: maintaining a healthy workforce, and delivering goods to their customers. The latter means having a strong, versatile supply chain. A robust, secure platform like Microsoft Dynamics 365 Supply Chain Management helps businesses make this a reality by enhancing every process, from supplier onboarding to monitoring vendor performance.