Manufacturing is a fast-paced, constantly evolving, and dynamic environment, and the supply chain is at its heart. For small and medium-sized manufacturers (SMMs), navigating the complexities of the supply chain often feels like a high-stakes balancing act. From juggling fluctuating material costs and delivery delays to meeting shifting market demands, it’s not always easy to maintain smooth operations. Yet, within these challenges lie potential opportunities to build resilience, innovate, and fuel growth.

In this article, we’ll explore some of the most pressing supply chain challenges faced by SMMs and how strategic actions, along with the right support, can transform these challenges into growth opportunities.

Before joining the Manufacturing Expansion Partnership (MEP), I spent more than 25 years working directly in manufacturing and supply chain management, leading process improvement initiatives and supplier development efforts. This hands-on experience gives me a deep understanding of the real-world challenges manufacturers face and the strategies that drive meaningful change.

Key supply chain challenges for SMMs

Small and medium-size manufacturers face numerous supply chain hurdles, many of which are overwhelming. However, addressing these challenges head-on will pave the way for long-term success.

Some of the most common supply chain difficulties include:

Fluctuating material costs: Material costs can rise unexpectedly due to market volatility, particularly for raw materials. These fluctuations can hurt profit margins, forcing SMMs to adjust prices or absorb increased costs.

Supply chain disruptions: Delivery delays, transportation bottlenecks, and unexpected shortages can disrupt production schedules, leading to missed deadlines, unsatisfied customers, and strained supplier relationships.

Lack of supplier diversification: Relying too heavily on a single supplier for key components or materials is risky, especially when unforeseen disruptions occur. Without diversification, manufacturers risk severe operational disruptions.

Limited visibility: Without real-time access to supply chain data, manufacturers struggle to anticipate potential issues, optimize inventory, or track product movement, leading to inefficiencies and delays.

Turning challenges into opportunities

Despite these challenges, the right strategies and partnerships can turn them into opportunities. Here are some actionable approaches manufacturers can take to overcome obstacles and improve their supply chain performance.

Strengthening supplier relationships and diversification

One of the most effective ways for SMMs to stabilize their supply chains is by nurturing robust relationships—ideally with multiple suppliers. Establishing clear communication, setting expectations, and maintaining long-term partnerships can improve the chances of securing on-time deliveries at competitive prices, and with consistent quality. Diversification is important when trying to mitigate risks, especially for critical components. By having strong relationships with multiple suppliers, manufacturers can reduce dependence on a single source and better navigate disruptions.

Example: Netzer Metalworks, a client of Maryland MEP, faced difficulty sourcing a supplier for several prototype injection-molded parts required for a client’s project. Maryland MEP leveraged its vast network to connect Netzer with eight new potential suppliers in just one week. This initiative helped Netzer resolve the immediate issue and paved the way for future partnerships, ensuring that its supply chain was more robust and diversified.

Adopting technology for real-time monitoring

Technology plays an increasingly important role in modern supply chain management. Integrating systems such as enterprise resource planning (ERP), artificial intelligence (AI), and the internet of things (IoT) provides manufacturers with real-time data to monitor and predict potential supply chain disruptions. These tools enable manufacturers to optimize inventory, improve visibility across the supply chain, and make better informed decisions in real time.

Example: Greno Industries, a precision machining company, was facing delays from its suppliers. By working with the Center for Economic Growth (CEG), part of New York MEP, Greno underwent a comprehensive supply chain assessment. The analysis helped identify best practices to streamline supplier management, improve communication, and reduce delays. By adopting these recommendations, Greno was able to enhance its operational efficiency and reduce lead times.

Agility and adaptation

In a constantly changing global marketplace, agility is one of the most valuable traits an SMM can develop. The ability to pivot quickly in response to new information—whether that’s shifting to local suppliers, adjusting production schedules, or modifying products to meet changing market demands—is a game changer. Manufacturers that embrace change and adaptability will be better positioned to navigate supply chain challenges.

Example: Topsoe, a Danish energy company, was building a $400 million electrolyzer facility in Virginia. However, there was no existing supply chain for the required components in the U.S. Through the MEP National Network, Topsoe was able to connect with approximately 12,000 potential suppliers nationwide. The collaboration led to identifying 35 suppliers that met the company’s needs, helping it build a strong foundation for this groundbreaking project.

Leveraging outside support

MEP Centers have an extensive manufacturing ecosystem of contacts available to manufacturers. They also offer other support such as supply chain assessments, technology adoption guidance, and knowledge of financial assistance that may be available to help manufacturers improve their operations and overcome challenges.

Example: Diana Kamada, founder of LapSnap, a company that produces collapsible carry-alls for wheelchair users, faced challenges in finding a reliable domestic manufacturer that could deliver on production requirements. Without industry contacts, Kamada turned to Rhode Island’s Polaris MEP. Through its support, Kamada was connected with seven U.S.-based suppliers, enabling her to successfully scale her business. Today, LapSnap enjoys steady sales, and Kamada credits MEP’s supplier scouting service with playing a pivotal role in her company’s success.

Optimizing supply chain efficiency through supplier scouting

Supplier scouting is a powerful service offered by MEP Centers assisting manufacturers in identifying domestic suppliers for their specific needs. MEP Centers are experts at helping manufacturers connect with qualified suppliers, whether it’s for reducing costs, improving lead times, or gaining access to advanced technologies.

Example: HeavyFoot Weight, a manufacturer of recreational safety equipment, faced challenges with high manufacturing costs. By partnering with Nevada MEP, HeavyFoot Weight was connected to several qualified suppliers, one of which helped reduce material costs by 60%. This collaboration not only lowered costs but also expanded the company’s product offerings, allowing it to reach new markets.

Strengthening your supply chain for long-term success

In today’s interconnected world, supply chain challenges are an inevitable part of doing business. For small and medium-sized manufacturers, these challenges can feel overwhelming. But with the right strategies and the support of MEP Centers, these challenges can be transformed into opportunities for innovation, efficiency, and growth.

With the help of MEP Centers, U.S. SMMs can access resources, contacts, and deep industry experience to navigate the complexities of modern manufacturing. SMMs that take a proactive approach to supply chain management will be better equipped to meet the demands of the market and thrive for years to come. Contact your local MEP Center today to discuss how it can help you find domestic suppliers or optimize your supply chain to position your business for long-term success.

Published March 18, 2025, in the NIST Manufacturing Innovation blog.