Are your goods in China or Cincinnati? That's the question...

In the highly competitive world of manufacturing, cost reduction is the name of the game. This is no secret to Canada's manufacturers, who increasingly source goods from low-cost locations such as China and India. The only catch? As manufacturers expand their supply chains around the world, it's becoming harder to efficiently manage the distribution of their products.

This situation is further complicated by manufacturers' traditional reliance on a range of distribution partners, from third-party carriers to third- and fourth-party logistics companies. In managing this web of relationships, manufacturers must be able to determine where their raw goods are, when they will receive them, whether those timelines will meet their customers' needs for finished products and how to best package and ship those products to customers in the most timely and cost-efficient manner possible.

The truth is, if you're using a manual system to gather this information, you're not only at risk of losing your goods. You're also at risk of losing your shirt.

Improving logistics through collaboration

The good news is that several collaboration strategies exist to help manufacturers streamline their distribution processes, such as:

• Providing your distributors with real-time access to your internal inventory, so they can time pick-ups and deliveries to coincide with inventory availability
• Automating the order entry process, so customers can enter their orders directly into your system and your system can stream those orders directly to your distribution partners to ensure customers receive their goods when requested
• Automating the delivery process so you can track the location of your goods and determine when they are scheduled for delivery. This is also helpful in cases where you may need to accelerate deliveries to certain customers
• Using collaboration software to stream orders directly from customers to your logistics company. Done right, this type of collaboration can even enable you to bypass the distribution centre in making deliveries to end consumers

By reducing delivery times to consumers, these collaboration strategies can eliminate waste and lower costs. They can also help you accelerate cycle times, better manage your inventory turns and reduce warehousing costs. As markets become increasingly competitive, manufacturers will need to leverage these advantages if they hope to remain relevant over the long term.

To learn more about this topic, or share comments or questions, contact David Lukey at Allstream at david.lukey@mtsallstream.com. In our next instalment, we'll discuss how to bring the various collaboration strategies together to strengthen the entire supply chain.