This blog post was co-authored by Lionel Albert, Oracle's Senior Director EMEA, Manufacturing and Supply Chain Planning.
Every year during the holidays, anxiety hits shoppers, retailers, and manufacturers alike about whether the season’s hottest products will face shortages. For manufacturers, at least, it doesn’t have to be this way.
Many manufacturers lack the end-to-end supply chain visibility and flexibility needed to plan for demand spikes, but you can improve your demand-planning capabilities by outsourcing at least some of your production processes. Subcontracting parts of your manufacturing operations can help you build flexibility into your supply chain and focus on your core competencies, such as brand building, product innovation or customer service.
The payoff includes reduced costs, shorter cycle times, agility to deal with demand and price pressures, and broader product portfolios. To gain the full advantages of outsourcing, you also need a holistic view of your supply chain.
Partner for Manufacturing Flexibility
Imagine you’re the producer of a much-anticipated electronics gadget. Media hype and marketing efforts have paid off. The holiday season is fast approaching, and your revised forecast now shows sales that are double your original projections. You realize your plants won’t have the capacity to meet demand.
Fortunately, you have a reliable network of suppliers and contract manufacturers that allows you to easily shift or boost production capacity to accommodate demand. At Oracle, we’re seeing many manufacturers adopt hybrid approaches to outsourcing, which may include:
These options allow you to maintain some control over manufacturing with the option to shift production to a partner if demand exceeds capacity. In addition, you should consider having alternate subcontractors or suppliers who are available on demand in the event of a disruption. You may even consider purchasing the same component or product from multiple suppliers so you can easily convert your order from one partner to another.
SCM Visibility Is Clearer in the Cloud
It’s clear that having production options are critical during the holiday season to ensure maximum profitability. But you still need visibility tools to monitor demand fluctuations and supplier capacity, and manage your supply chain and manufacturing operations with an outside-in approach. We’re helping manufacturers gain control over demand and supply planning with a variety of cloud-based supply chain management (SCM) solutions.
Oracle Plan to Produce is an integrated suite of supply chain cloud applications that includes manufacturing, inventory and cost-management tools. It allows you to plan demand, inventory, and supply both inside and outside your operations. You can monitor exceptions with advanced analytics and simulate and respond to late orders, material shortages, and other issues by prioritizing and releasing supply recommendations to other Oracle SCM Cloud applications.
Even if you have access to supply chain data, you might still struggle to fulfill orders because the data doesn’t offer actionable insights. With Oracle SCM Cloud, you can match your orders to your suppliers' inventory and take action based on the information you receive.
One of the fulfillment features in Oracle SCM Cloud is contract manufacturing. This feature is particularly useful during the holiday rush. It helps you decide whether your current manufacturing partner can handle a major ramp up, or whether you need to consider other options. You receive real-time visibility into the production progress that occurs at your partner’s site, and you can monitor component supplies at the contractor’s site to ensure they can meet your needs.
That’s important because your suppliers may face their own demand fluctuations and capacity constraints as they gear up for the holidays. It’s this combination of strategic sourcing and end-to-end visibility that helps you make fast, intelligent decisions to avoid unwanted holiday surprises.
Learn more about Oracle Manufacturing Solutions