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Manufacturing is the organised activity devoted to the transformation of raw materials into marketable goods. The manufacturing system usually employs a series of value-adding processes to convert raw materials into more useful forms, and eventually into finished products. The outputs from one manufacturing system may be utilised as the inputs to another. A manufacturing system is, therefore, a typical input-output system, which produces outputs i.e. finished products through activities of transformation from inputs (raw materials).
Every manufacturing industry is plagued by its own supply chain constraints depending upon the kind of raw material required, their sourcing location, market etc. Commodities which are of low value and high bulk in nature have their outward freight accounting for a huge portion of the total manufacturing cost. In addition, raw material transportation also adds to the total costs in a big way in all such commodities. In this scenario, the location of the manufacturing plant becomes crucial.
While deciding on the plant location, there is a trade-off between proximity to raw material sources and proximity to markets. The plant also has to address issues of logistics (evacuation of product by rail, road or waterways), power availability in the region, and availability of materials. On the other end of the spectrum are high valued goods where the challenge is to keep innovating and improving the product and at the same time keep the prices down. In such a scenario, product life cycle takes on a whole new meaning with decreasing lead times, JIT and Lean manufacturing etc. Since, the location of the manufacturing plant is driven by the proximity of the raw material availability, there are bound to be regional disparities in terms of the total production which results in large relocation of the good from one region to another that adds to the transportation burden.
For a high bulk commodity, another factor which eats away the revenue is a large network of distribution channel required that has huge costs associated with it. Sourcing and procurement of raw materials is ridden with bureaucracy as almost all the crucial inputs required in a manufacturing industry (coal, transportation, power) have monopolistic control by either the government or only a few private players which leads to loss in bargaining power. Inventory management and optimization poses stringent challenges in lieu of supply and demand mismatch in various regions and resulting relocation required. With the growth of the third world economies, issues relating to capacity planning, increasing the output with existing infrastructure, production scheduling have become of paramount importance in order to meet the ever rising demand.
Today, manufacturing industries face challenge of constantly improving their products and bringing new products to the market, while keeping their prices low. Supply chain has been identified as the major source of cost cutting across the manufacturing industry since effective design plays crucial role in the supply chain. Certain designs may increase inventory holding or transportation costs relative to other design, while other designs may lead to a shorter manufacturing lead times. Questions like - what changes should be made in the supply chain to take advantage of the new process design or for that matter, how to redesign the existing processes to reduce logistics costs and if that’s worthwhile – have become pertinent than ever before. Supply chain should act as an enabler of meeting manufacturing firm’s goals rather than becoming a hindrance towards the goal.
Clients come to us with varying needs - It could be gearing up the manufacturing processes to meet busniess objectives or transforming operations in terms of new processes - In every way, we at Aqua MCG offer thought leadership in meeting needs in all servie areas in the manufacturing industry, be it in the strategic domain or planning systems or quality control measures or right at the shop floor level. At Aqua MCG, we have the Best in Class capabilities to serve your manufacturing needs.
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