Supply Chain Disruptions: Why Strategic Variant Management Matters

Supply chain disruptions have intensified in 2024, with KPMG reporting more frequent interruptions from labor strikes, geopolitical tensions disrupt material flows, and climate-related events.

To navigate these uncertainties, manufacturers must carefully evaluate their suppliers and sourcing options, often requiring agile and precise cost calculations for multiple scenarios. This makes variant management not just a strategic necessity but a critical tool for maintaining profitability and resilience in a volatile environment. But here's the good news: with the right tools, you can turn this challenging task into a streamlined, cost-effective process.

How Supply Chain Disruptions Are Redefining Manufacturing Operations

Supply chain disruptions trigger a domino effect across manufacturing operations. From difficulties in securing essential materials to navigating rising costs, these disruptions can jeopardize production timelines and operational efficiency. As Global Trade Magazine highlights, manufacturers relying on a single supplier or lacking a diversified supply chain face greater risks of delays and cost surges when disruptions occur.

The scarcity of critical materials adds another layer of complexity. High-demand resources like rare metals face sourcing challenges due to limited supply and geopolitical restrictions. Mining operations frequently encounter disruptions through strikes and government-imposed shutdowns, while countries controlling essential materials often leverage their position to influence prices and politics.

Economic pressures in 2024 further complicated these challenges. As Deloitte reports, "manufacturers continue to face higher costs: The producer price index for input materials and components seems to have stabilized but remains high, while total compensation, which includes wages and benefits, has continued its upward climb." This combination of inflation, rising labor costs, and recession threats is pushing manufacturers to seek advanced tools for managing their growing product portfolios more efficiently.

The Role of Accurate Variant Management in Supply Chain Resilience

In this complex landscape, manufacturers must prepare for various scenarios: supplier bankruptcies, labor strikes, and climate-related disruptions. Navigating these challenges requires more than reactive strategies—it demands accurate and effective variant cost management to remain competitive.

Here’s why efficient cost calculation of variants is crucial for manufacturers:

Overcoming the Variant Costing Challenges

Despite its importance, variant cost management presents specific challenges that manufacturers must address:

• Time-Consuming and Error-Prone Calculations: Cost engineers spend countless hours jumping between spreadsheets and systems, creating a perfect storm of inefficiency. Manual calculations across multiple product variants not only drain valuable resources but also increase the likelihood of costly mistakes.
• Limited Visibility Across Variants: As economic uncertainties grow, the scattered data across different platforms creates dangerous blind spots in variant cost analysis. Without a comprehensive view, identifying cost-saving opportunities becomes nearly impossible—a risk manufacturers can't afford in today's climate.
• Challenges with New Product Variants: When introducing new variants to meet market demands, traditional tools often fall short. This limitation forces engineers to rely on approximations, potentially compromising accuracy when precision is most crucial for maintaining competitiveness.

Why Tset? 

Tset’s cloud-based solution is purpose-built to address the challenges of variant management. By adopting Tset, manufacturers gain the ability to:

Evaluate Multiple Suppliers with Ease

Tset's dynamic cost calculation tools allow you to compare supplier options quickly, ensuring you choose the most cost-effective and reliable partners.

Adapt to Disruptions in Real-Time

Whether sourcing components from new suppliers or redesigning a product to meet changing demands, Tset's real-time insights and automated calculations streamline decision-making.

Simplify Complexity with Centralized Data

By providing a single source of truth for variant cost data, Tset breaks down silos and fosters collaboration across engineering, procurement, and supply chain teams.

Scale Seamlessly for Growth

As supply chain challenges evolve, Tset's flexible architecture adapts to new variants and sourcing strategies, ensuring your cost management processes remain future-proof.

Tset empowers cost engineers to focus on driving value, identifying cost optimization opportunities, and delivering better business outcomes. The platform also enables the creation of a central knowledge base, ensuring that team standards and expertise are preserved, even as personnel change.