The modern supply chain is more transparent than ever before. Because of IoT (Internet of Things), shipments are seen in real-time. IoT devices are connected to systems through data and Wi-Fi. They come in many forms and provide the ability to enhance quality management throughout the supply chain.

With today’s supply chain challenges, companies must be more strategic in managing supplier and distributor relationships. Complications can often arise, and companies must be prepared to respond promptly and efficiently. 

It has been three years since the outbreak of the pandemic, which changed our lives. Despite more advanced economies being on the path to recovery, global supply chain disruptions are still a major problem due to trade stress.

Russia’s invasion of Ukraine has added an extra layer of uncertainty to supply chains and markets around the world. Specifically, the conflict has greatly impacted the nickel industry.

From the Old Days of Paper & Fax to Electronic Communications

Today the relationships in industrial distribution are complex, requiring channels of communication between manufacturers of parts and components to effectively communicate with their distribution network electronically, on a real-time basis. This method of communication is known as EDI, electronic data interchange. 

As OEM procurement departments develop strong supplier relationships they gain a solid understanding of the suppliers’ business, products and services, ultimately fostering a dependable partnership. In turn, this allows the supplier to better understand the OEMs’ needs and respond more effectively and efficiently. This fosters an increased economy of scale for both parties. Each organization is able to collaborate on product enhancements, new product development, managing inventories and exploring potential areas of consolidation.

The cost of components and managing the supply can represent a large portion of the final equipment costs.  Mismanagement of the supply chain can spiral out of control by incurring higher product and production costs, inventory overruns and strangling cash flow.

Some key considerations in managing the sometimes hidden cost overruns of the supply chain are:

According to a survey by Deloitte, organizations with superior supply chain capabilities demonstrate significantly above average performance on both revenue growth and EBIT (Earnings Before Interest and Taxes) when compared to industry average:

Supply Chain Efficiencies With Trusted Qualified Vendors

Up until the 1970s and ‘80s General Motors had dozens of autonomous manufacturing plants that did their own thing. Each plant had their own vendors and largely operated on their own schedules. Then in 1984, GM purchased Electronic Data Systems (EDS) in an effort to tie together cross functional operations and eliminate redundancies through more real-time data communication. EDS founder Ross Perot joined the GM board of directors and became GM’s largest individual stockholder while retaining control of EDS as chairman. 

Managing Fragmentation In Construction Equipment Parts Supply Chain 
According to a study by Zion Market Research “the global heavy construction equipment market was valued at $145 billion USD in 2018 and is expected to reach $231.3 billion USD by 2025, at a compound annual growth rate (CAGR) of 6.9% between 2019 and 2025."