Build a Supply Chain Roadmap to Grow Your Future Business

A new priority seems to be emerging as domestic manufacturing enters a renaissance:

Manufacturers are looking for a simple way to identify suppliers and customers who can meet their short-term needs and help them take advantage of significant industry changes to grow their business.

The domestic manufacturing landscape is undergoing a profound transformation, driven by areas such as:

• Reshoring: There’s an increased emphasis on supply chain resiliency, bringing manufacturing closer to home to reduce risks and improve responsiveness.
• Digital Transformation: Adoption of artificial intelligence, automation, and simulation is enhancing efficiency, productivity, and product quality.
• Sustainability: The industry’s growing focus on sustainable manufacturing practices is increasing demand for lighter weight yet stronger materials.
• Customization: More and more, customers expect tailored products, flexible manufacturing, and agility.

Manufacturers want to develop a more sustainable regional base of customers and suppliers. So the supplier scouting process is evolving from business-to-business (B2B) matchmaking to closing gaps in the supply chain.

Industry Developments Offer New Opportunities

Domestic manufacturing is undergoing a boom in reshoring for critical industries, including automotive, electronics, machinery, and textiles. Companies are constructing U.S. manufacturing facilities at a higher rate than any other property type. The new construction is dominated by facilities for computer, electronic, and electrical manufacturing.

The construction boom is being driven in part by Federal investments, such as the Bipartisan Infrastructure Law and the CHIPS and Science Act, all of which contain stipulations regarding the production and procurement of U.S.-made products and components.

While large companies are prominent in the construction boom, opportunities will trickle down through Tier 2 and 3 suppliers to small and medium-sized manufacturers. Many of these critical industries – and other critical sectors such as aerospace, aviation, energy, and health care – now require their suppliers to have ISO certifications and quality management systems. Some larger companies are requiring suppliers to have compatible enterprise resource planning (ERP) systems, which can increase visibility in the supply chain through real-time data sharing. This will support better forecasting and make it easier to identify disruptions in the supply chain.

The vast majority of manufacturers in the U.S., about 74 percent, have 20 or fewer employees and may not have the skills or capacity to understand how they best fit into this emerging ecosystem. They do not have the resources to reach out to potential partners and adequately vet their capabilities and capacities. They need help to build a regional supply chain roadmap for their future business.

How Supplier Scouting Is Evolving Beyond Databases and B2B Match

Here at the Oklahoma Manufacturing Alliance (OMA), part of the MEP National Network, we have developed a more nuanced supplier scouting process to help bridge supply chain gaps. Legacy supplier scouting is primarily a B2B match based on a database of manufacturers. But manufacturing databases have limitations, such as showing a company’s capabilities but not capacity. Databases also are not dynamic, so they may not reflect current capabilities.

This is where OMA and other local MEP Centers bring more to the equation, with  trusted relationships, knowledge of business plans, and unique understandings of business models and the goals of each party. They are not just making a sale.

For example, once OMA learns about the needs of an original equipment manufacturer (OEM) and understands what capabilities are required to meet those needs, they can identify what local suppliers are capable of doing that work and which companies might be able to pivot to produce the needed parts or components. It’s more than simply identifying providers of certain parts and more an evaluation of who has the capacity to do the work.

This process helps manufacturers in two ways. First, it provides leads for some companies. They are aware of real opportunities for new business. Second, it helps companies learn what they need to do in order to become supplier-ready by closing gaps in capabilities or certifications.

A manufacturer may be a fit in the electronics sector if they can provide precision manufacturing, component assembly, and packaging. If they have or can develop expertise in lightweight materials, advanced composites, and precision machining, they may find additional work in aviation and aerospace. Companies that have a prowess in quality control, sterilization, and compliance with stringent regulations could see opportunities in medical devices.

Bridging Supply Chain Gaps

What’s different in this supplier scouting equation is how your local MEP Center can present opportunities to small manufacturers. It’s traditionally been a hard sell to convince a manufacturer to invest in equipment without having clear outcomes.

Local MEP Centers can now bring local manufacturers immediate and future opportunities. In one case, OMA approached local manufacturers with a $1.2 million short-term opportunity and discussed how the OEM in question could represent long-term opportunities as well.

Let’s consider another recent example from OMA. A large defense sector company secured a massive contract but needed to free up capacity to handle the additional demands. They approached OMA to help offload millions of dollars' worth of existing projects to capable Tier 1 and 2 suppliers in the region, which allowed them to focus on phase 2 of the new contract. OMA’s expertise and ongoing relationships were crucial in identifying suppliers who could take on these projects or rapidly adjust to meet the requirements.

OMA worked with the defense sector company to create a roadmap for their regional supply chain future, starting with a broad list of capabilities needed and requirements. OMA assessed potential suppliers by seeking to answer the following questions:

• If they have capabilities, do they have capacity?
• What gaps do they have?

OMA then went back to the OEM with two tiers of prospects, based on capacity and readiness:

• A group of suppliers ready to do business
• A prospect group that needed to make adjustments or investments before they would be ready to do business

The defense sector company also must make a massive investment in plant renovations and new equipment for the new business. OMA is linking them to state support and incentives for expansions while finding outlets for their current needs. Now the company also has confidence that their local MEP Center (OMA) can help the potential future partner companies close their capability gaps and get up to speed more quickly.

Your Local MEP Center Can Help You Build a Regional Supply Chain Map

Many small manufacturers are looking for full-service scouting solutions, from sourcing possible suppliers to vetting and qualifying new suppliers. Your local MEP Center can help you build a supply chain roadmap for your future business. Contact your local MEP Center to start the conversation.

About the Authors

Joe Edmondson is a Certified Supply Chain Professional (CSCP) for the Oklahoma Manufacturing Alliance, part of the MEP National Network. Dave Rowland is President and CEO of the Oklahoma Manufacturing Alliance.

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