As Chinese manufacturing slows and the war in Ukraine continues, more U.S. companies are shifting their offshore operations back to reshoring or near-shoring activities. Closer, faster, and more streamlined are the big themes for the U.S. manufacturing industry as reshoring and foreign direct investment (FDI) accelerate domestically. According to the Reshoring Initiative, producing in or near the home market benefits companies with higher product quality and consistency, a skilled workforce, better lead times, more manageable inventory levels, and improved responses to ever-changing customer preferences.
CNBC notes that mentions of “reshoring” and “AI” in S&P 500 earnings call transcripts rose exponentially during the past year. The connection becomes clearer in other ways as well. A USB analyst points out that more U.S. companies are making capital expenditures to build new facilities, buy new equipment, and create a more substantial infrastructure that utilizes AI in its operational focus.
With the rise in technological innovations, the industry is seeing a complete rethink in how manufacturers function and collaborate internally and with external suppliers.
Traditionally, manufacturers have relied on Enterprise Resource Planning (ERP) systems for maintenance, repair, and operations (MRO) inventory management. However, they need more advanced analytical capabilities to drive the strategic procurement and operations management required to optimize spare parts and MRO materials.
With a revised agenda, management commitments, new goals, and burgeoning technology capabilities in MRO/inventory management, manufacturers need to step up their game and improve their communications and technology, and AI can certainly help.
Managing collaboration issues internally and with suppliers, especially as companies bring production back to the U.S., is not as daunting a task as it may initially seem. Occasional challenges and misunderstandings may arise between suppliers and procurement specialists, but using today’s streamlined AI systems to handle communications flow can help minimize these issues.
In particular, a significant time gap exists between when a product user identifies their needs and when they communicate that information to a supplier before placing an order. Addressing this issue involves having the capability to share real-time updates on changes in demand. This facilitates improved management and awareness of product availability, reduces lead times, and expands networks beyond individual environments.
AI can analyze large amounts of data across the supply chain to identify inefficiencies, delays, or other issues. It can then recommend ways to streamline communication and coordination between teams, departments, and partner companies and significantly impact MRO (Maintenance, Repair, and Operations) strategies.
Manufacturers and suppliers can strategically align themselves through MRO to optimize their supply chains for service, cost-to-serve, capital, and waste reduction. Manufacturers and suppliers can streamline their MRO processes and gain a mutual competitive advantage by building a collaborative relationship based on trust, open communication, and shared goals.
The past year has seen a sudden uptick in the use of AI to maximize better communications between buyers and suppliers for supply chain optimization. The precise reasons for this growth come down to significant benefits manufacturers are starting to realize:
Through data-driven insights stemming from real-world transactions, AI boosts the performance of buyer-supplier collaboration, as it helps companies simulate different supply chain scenarios and stress-test their networks. Redundancies and flexibility can be built into systems, allowing for better cooperation during disruptions and a massively important benefit as U.S. manufacturing and production move back onshore.
Most businesses today still rely on disparate and outdated systems, restricting the ability to establish real-time visibility of MRO inventory data. Siloed data and slow, manual systems are not flexible enough to respond to operational and procurement needs, making the system rife with inefficiencies.
To better meet the challenges associated with reshoring, an AI-powered MRO platform can provide a holistic view of the entire supply network, helping ensure optimal collaboration between partners and the fast, accurate, and efficient support domestic manufacturing will require.