MSPs and consultancies have always had opportunities to help manufacturing businesses improve their processes and use innovative technologies to stay competitive. However, the COVID-19 pandemic has presented an even greater need for guidance in building resilience in supply chains.
"The art of the supply chain is a bunch of mini problems,'' said Meagan Bowman, founder and CEO of Stonehenge Technology Labs, a platform provider of B2B middleware for consumer packaged goods companies (CPGs).
How the past few years have shaped supply chain disruptions
No one can deny the massive impact supply chain woes have wrought on the manufacturing industry in the past few years. During the height of the pandemic, it became clear that parts of the supply chain haven't been disrupted for a long time, and bottlenecks began shifting from one chain to another, Bowman said.
Even if companies automated their financial and ERP systems, a lot of Stonehenge's clients have been reluctant to make significant investments in digitizing their entire supply chain processes and operations, she said.
Furthermore, "not every company is taking the time to investigate the root cause … they're not peeling back the layers of the supply chain within purchasing, operations or logistics to understand their transactional data better," said Nathanael Powrie, executive vice president of data analytics at SGS-Maine Pointe, a supply chain consultancy. Powrie believes the biggest reason is "a lack of bodies. They don't have the tools that allow them to digest all the data in their ERPs in a way they can process and drive better supply chain visibility with the data they have."
How MSPs, consultants and vendors are responding
Since the supply chain problems began, MSPs have been helping customers in many vertical markets deal with these challenges, said Charles Weaver, co-founder and CEO of MSPAlliance. Some of the solutions MSPs offer "that have been applied consistently across multiple market verticals," according to Weaver, include the following:
- consulting for extending hardware and software lifecycles to accommodate challenging supply chain limitations;
- virtualized desktop solutions that use existing hardware -- including personal devices -- to run virtual desktop environments, obviating the need for more traditional hardware refresh cycles; and
- cloud solutions -- migration projects involving traditional hardware buildouts during a supply chain crisis have been resolved by transitioning to cloud computing.
Virtualizing servers, using third-party cloud infrastructure and many other solutions appeal to customers who would otherwise struggle because of supply chain issues to procure sufficient hardware, software and services to accomplish their IT goals.
Bowman doesn't agree that MSPs and consultants provide value with supply chain issues. As a middleware vendor with a background in engineering, Bowman said she doesn't "have a lot of respect for MSPs and consultancies. At the end of the day, MSPs and consultants are telling companies what to do."
She said she sees "a lot of wasted time and money in companies because MSPs and others come in and say they need a bunch of nonessential machine learning and artificial intelligence." Bowman maintains that all CPGs need is an ERP system, a database, a lot of good data cleaning and engineering.
At the recent Shoptalk retail tech event in Las Vegas, Bowman said she heard that CPGs are "going back to the basics" with "unsexy, unmarketed, deep technologies," such as Snowflake and Databricks. Bowman later clarified that these deep technologies are designed to integrate at a deeper level than classic SaaS pickup subscriptions, such as Sellics or Profitero, and consequently are not marketed like consumer technology. CPGs are "hiring more specialized data engineers and architects to untangle these bigger tech plays vs. just giving every territory rep a small budget to put together a quick [business intelligence] tool suite," Bowman said.
Powrie, of course, sees it differently, saying that SGS-Maine Pointe's strategy in response to the trends in manufacturing has been to shift from "driving cost efficiency to driving supply chain flexibility" to help companies be more resilient.
With so much volatility across the supply chain, manufacturers need to have good contingency plans in place to be able to react to changes in the logistics marketplace. For example, one area SGS-Maine Pointe focuses on is helping customers deal with the lack of resources and transportation providers or lack of products within their current supply chain.
"Part of the problem is customers' incumbent carriers don't have the necessary products or resources to move or fulfill that demand. So, it's not necessarily [that] their clients are asking for cost reductions; they're looking for ways to mitigate the risk associated with their supply chain when their suppliers don't have available products or, from the distribution side, their carriers don't have enough trucks to run that product to their customers," Powrie said.
SGS-Maine Pointe works with clients to find what options they have during these disruptive times, he said.
Challenges to address
Bowman said Stonehenge has been building out its Stopwatch platform to unclog parts of the supply chain that have presented big problems. Getting goods out of China has never been a big issue, she said, "but when you have labor shortages in places that are producing [products], that puts stress on the supply chain in ways we have not been ready to solve for, process-wise or technologically. We haven't built contingency plans around that."
Companies have not planned all the steps and coordination efforts within a supply chain when a war is happening, she said. "It's not a contingency thought leaders have been thinking about,'' she said.
Nathanael PowrieExecutive vice president of data analytics, SGS-Maine Pointe
Rather, they have been more focused on how to get products on boats and then onto trucks. "Those are the optimization pieces closer to where consumers interact with things. This is forcing us upstream within the whole supply chain system, and once we have to move upstream because we haven't been solving for that over time, everything's been breaking down."
Bowman maintains that "consultancies and MSPs need to understand the world is tired of talking, and if you learn engineering techniques, you'll be more valuable." Pre-pandemic, she said she "couldn't get meetings with anyone,'' but now, CPGs are "running to the smaller startups that can actually do the engineering" because supply chain bottlenecks are a pain point for them.
Because Stopwatch "plays closer to the middle of the [tech] stack," Bowman said she recently got a "$1 million check from a huge CPG" to spin up a server. "The market is finding solutions, and until service providers can come up with unique, technically grounded solutions and packages, [consumer and retail manufacturers] don't have time to talk about anything anymore."
Powrie said manufacturers must be able to use existing data and tie it all together if they are to stay resilient. Clients demand that SGS-Maine Pointe include digital solutions as part of their implementation plan, he said. So, the firm is building its own software or partnering with other companies to create digital twins for clients. This lets them test scenarios of what they should be doing and figure out if they have the right footprint and supply chain visibility to service customer demand, Powrie said.
"What we're seeing now is it's no longer about globalization, but [having a] regional footprint." If manufacturers are shifting their supply chains from China back to the U.S., digital twins can help them assess what that will do to their footprint and their risk profile, he said. "Developing digital twins is a way for them to mitigate the risk associated with testing that optionality."
COVID-19 set the stage for digitizing supply chains, but "recent events are trending in a way that … requires balancing tradeoffs between the efficiency and resiliency of the supply chain. That means less dependency on global hubs and sourcing closer to home,'' Powrie said.