Contract Manufacturing (CM) has provided manufacturers great relief in their production processes.
According to the 2021 report from the Contract Packaging Association, the CM industry is worth $75.6 billion and will grow at twice the speed in the year 2022. The phenomenon shows how important external partnerships are for almost every manufacturer worldwide.
Due to the current pandemic, incidents, and global trends,
we can also foresee — that more and more new contract manufacturers would be blooming onshore as businesses are, more or less, remodeling their value chains.
However, collaborating with these external partners can also mean disarrangements and disharmonies:
Separated business entities hardly communicate in real-time, which causes problems such as missing delivery dates or lack of information about a sudden change of plan.
Based on our experience of working with manufacturers and their partners, we’ve found the following 3 failures that a manufacturer should avoid if they’re looking for external partnering relationships.
Changes of Plan Causing Chain Reactions
In manufacturing, change is the only constant.
Production plans are always in flux according to the demand and supply of the time. Once changes happen, they could ripple throughout the entire production chain and affect all members of the network.
For example, when a customer cancels a large batch of orders, the manufacturer might have to change their production plans to avoid tieing-up themselves in excess inventory. And If its external manufacturing partners were not notified in time, their production process might also be heavily disrupted.
This is such a trainwreck that no one wants and in which, everyone loses.
In best cases, external partners should have their bespoke views to relevant data, where critical plan changes could be transmitted live. With that, external partners could react quickly and see that incoming trainwreck miles away.
Being Left in the Dark due to Lack of Communications
For many manufacturers, it is a nightmare not to know the current status of their CMs’ production processes. Sometimes the communication just goes dark, and no one knows what’s going on on the other side.
What happened to the new orders? Is the production a go? These questions are often left for weeks and answered with an email with abstract information.
Forward-thinking manufacturers are now using production planning software that gives their external partners special external accounts to update their ongoing production status and upcoming orders.
These proactive measures will soon be the future norm to eliminate radio silences and ambiguous emails for manufacturers and their external partners.
Information Lost in Multi-national Operations
For manufacturers who work with partners overseas, timezones are also a significant issue for effective communication.
When a CM starts their work at 7 am in Country A, it’s already 8 pm in Country B during summer. That means if any substantial changes happen on the CM in Country A, manufacturers in Country B will mostly receive their email a couple of hours after everything goes down.
Not to mention the email could also get buried in a high-volume inbox after such a long time.
That’s why a direct, cloud-based production feedback system is the key to successful coordinated production planning.
Some innovative planning solutions will now allow external partners a Dashboard for their production overview. They also allow qualified partners to report their real-time shop floor status directly to the manufacturer, for example, updating yield & scrap factors, or even whether their machine has broken down that day.
Now, manufacturers can finally say goodbye to missed emails and manual logging by having their partners update for them. Many successful manufacturers have already been coordinating their productions with innovative solutions like this. It helps them better cope with the challenges in contract manufacturing, increases communication efficiency, and shortens the reaction time throughout the entire chain of production.
In the early stages, partners know what to expect, and the manufacturers know their orders will be fulfilled on time. At the same time, everyone still benefits from what contract manufacturing brings.
Our Manufacturing Solution planeus
planeus is the manufacturing planning solution that helps you prevent these (and many more) failures for you and your partners.
Being the first of its kind, it gives insights into both your in-house production processes and those of your external partners.
In planeus, you can easily set new user accounts for your external partners with an on/off switch. On top of that, you can also change their manufacturing resources to external, so their operations will not affect your core production planning.
All external users will then receive a Dashboard about their production process and be able to update their shop floor status.
However, you still have absolute control over what your external partners can see or edit. You can simply add in and take away modules, or even switch some of those to read-only for their external users’ accounts in User Management.
Now, not only can you enjoy the innovative planning features that planeus offers, but also your contract manufacturing partners!
planeus is currently offering a Free 14-Days trial with no credit card information needed.