Major shocks to supply and demand over the course of the pandemic have exposed the fragility and vulnerabilities of the global supply chain. One silver lining is the realization, across industries, that a more agile approach is needed. To stabilize supply chains, whether localized or on a global scale, every organization must architect resiliency into their supply chains, scaling operations to meet customers’ needs, and proactively overcome disruptions to ensure business continuity and operate profitably.
This year, at Hannover Messe Digital Edition, we are showcasing new Microsoft Dynamics 365 capabilities to help companies easily scale production and distribution, keep critical processes running, and ensure continuity on the frontlines of manufacturing. Learn more about how Microsoft Cloud for Manufacturing is helping create a more resilient and sustainable future through open standards and ecosystems.
Looking back to move forward: The ripple effect of semiconductor shortages
The ripple effect created by semiconductor shortages in the past year underpins the need for greater agility and resilience across supply chains. As demand for automobiles slowed down at the beginning of the pandemic, automobile manufacturers stocked less inventory of critical semiconductor components to keep operational costs low. During the same period, demand for consumer electronics like computers and tablets grew due to the surge in remote work and online schools. As a result, the same semiconductor manufacturing company that was supplying raw materials to automobile manufacturers increased its allocation to consumer electronics manufacturing companies.
When the demand for automobiles started to rise again in the latter part of 2020, automobile manufacturers struggled to ramp up production to meet demand due to shortages in critical semiconductor components, resulting in decreased revenue and temporary plant closures. To strengthen the supply chains of these critical raw materials and wither any geopolitical storms that can disrupt the supply chain for critical components coming from Asia and Europe, organizations worldwide have started to reconfigure their supply chain network and build new agile factories.
How Microsoft is helping to create more agile, resilient supply chains
IDC’s 2020 Supply Chain Survey1 explored how companies would manage risk and enable supply chain visibility to achieve supply chain resiliency. The focus for risk and visibility from most respondent companies were primarily in supply chain planning (57 percent) and end-to-end supply chain (56 percent) including visibility into factory (39 percent). The tools that the companies expected to use to enhance visibility includes best of breed and edge supply chain application, enterprise collaboration tools, specialized BI and analysis tools, and supplier or customer portal and workflow management solutions—solutions that align to our focus areas of innovation to help organizations architect resiliency into every level of the business, from supply chains to distribution to finance and service.
At Hannover Messe Digital Edition, we are also showcasing the new cloud and edge scale unit add-ins for Microsoft Dynamics 365 Supply Chain Management, which were previewed in October 2020, that enables companies to easily scale production and distribution during peaks and keep critical processes running at high throughput on the edge.