AP Automation for Manufacturers: The Supply Chain Resilience Lifeline

Supply chain disruptions aren’t a passing storm—they’re the new climate for manufacturers.

From global pandemics to raw material shortages, geopolitical tensions, and unexpected natural disasters, manufacturers now operate in a world where disruptions are a constant. For finance and operations teams, these challenges aren’t just logistical headaches. They lead to blown budgets, stalled production, and strained supplier relationships.

So, how do manufacturers weather this storm? The answer lies in the often-overlooked engine room of the operation: Accounts Payable (AP).

AP automation isn’t just a “nice-to-have” anymore. It’s a must-have for manufacturers who want to keep production lines humming, supplier relationships strong, and operations agile, even when chaos hits.

The Age of Permanent Disruption

Manufacturers today navigate a complex web of unpredictable supply chain challenges that directly impact production timelines and profitability. According to Advanced Manufacturing, nearly 75% of manufacturers have experienced supply chain disruptions in the past two years. Raw material shortages, port congestion, labor strikes, and fluctuating demand have become routine obstacles.

And recovery isn’t quick: 60% of manufacturing companies take at least three months to recover from supply chain disruptions.

Yet, while external disruptions are inevitable, internal inefficiencies shouldn’t make matters worse, especially when they can be controlled. Traditional AP processes like manual invoice approvals, paper checks, and fragmented communication only make delays worse. Late payments can trigger fees, damage supplier relationships, and, worst of all, grind production to a halt.

Imagine a critical brake system component for a heavy-duty truck build is stuck at the port. Your supplier requires same-day payment to expedite shipping—but your AP team is buried in paperwork, waiting for approvals from three different departments. By the time the invoice gets sorted out, your production line is at a standstill, costing thousands per hour.

That’s the kind of disruption AP automation helps prevent.

Strengthening Supplier Relationships Through Timely Payments

In manufacturing, strong supplier relationships are not just beneficial but essential. Suppliers prioritize clients who pay on time—or better yet, early. Nearly 82% of manufacturers say the ability to time supplier payments strategically gives them an advantage during supply chain disruptions.

And the stakes are high. Sixty-seven percent of suppliers would consider dropping customers with consistent late payments, especially when materials are scarce.

AP automation ensures finance teams never become the bottleneck in the supply chain. Automated systems streamline invoice processing, flagging early payment discounts and ensuring no invoice slips through the cracks.

This isn’t just about avoiding late fees; it’s about securing priority with your suppliers. When supply is tight, being the client suppliers trust can make or break your ability to secure materials. Manufacturers that strengthen supplier relationships through streamlined processes gain a competitive edge in tight markets.

Think about it this way: If your parts supplier only has enough steel for one more order this month, who do you think they’ll prioritize—the customer who always pays late, or the one who always pays early?

When supply is unpredictable, having priority with suppliers can make all the difference.

Keeping Production Lines Running No Matter What

One of the biggest risks of supply chain disruptions? Stalled production.

Every delay, whether caused by unpaid invoices, missing components, or supplier fallout, directly translates into lost revenue. That’s why manufacturers can’t afford a sluggish AP process when securing materials.

AP automation empowers finance teams to act fast. When an urgent payment is needed to secure materials or expedite shipping, there’s no waiting on manual approvals. With real-time dashboards, automated workflows, and clear audit trails, decision-makers can approve payments in minutes rather than days.

For example, a parts manufacturer relying on just-in-time inventory suddenly faces a supplier delay. Without instant payment processing, that delay could push an entire assembly line off schedule, affecting deliveries for weeks.

Manufacturers using AP automation reduce invoice processing times by up to 80%. Efficiency matters, but the real impact is meeting production deadlines instead of missing them.

A Real-World Example: How Lockheed Martin Transformed AP Operations

Even industry giants like Lockheed Martin have faced major AP inefficiencies, proving that no company is immune to these challenges. Lockheed Martin, a global aerospace and defense leader with 350+ facilities and a vast supplier network, struggled with slow, paper-based financial workflows that delayed procurement and approvals. Manual invoice processing created bottlenecks, leading to lost documentation and costly inefficiencies.

By implementing onPhase’s AP automation solution, Lockheed Martin reimagined its workflow from the ground up, eliminating silos and streamlining invoice approvals. The impact was massive—a 96% increase in productivity, a 46% reduction in processing time, and a 49% faster cycle time. These improvements not only saved millions in operational costs but also strengthened supplier relationships by ensuring faster, more reliable payments. Read the full case study here.

Enhancing Visibility and Control Over Cash Flow

In manufacturing's unpredictable markets, optimized cash flow is the difference between capitalizing on opportunities and missing critical production windows. The ability to see and control finances in real time separates manufacturers that can pivot quickly from those stuck reacting to problems too late.

According to PwC’s Working Capital Report 2023, manufacturers with real-time visibility into AP processes improve working capital by 25% on average. That’s because when finance leaders have instant access to outstanding invoices, upcoming payment schedules, and cash flow forecasts all in one place, they can make smarter, faster decisions.

Rather than scrambling through spreadsheets or chasing down approvals via email, AP automation puts everything at their fingertips. This means finance teams can time payments strategically, take advantage of early payment discounts, and delay non-urgent payments when necessary to keep liquidity strong.

And when AP automation is integrated with ERP systems, the benefits go even further. Companies that connect AP automation with ERP software gain full visibility across finance, procurement, and operations, ensuring every dollar is accounted for, every invoice is tracked, and every decision is backed by real-time data.

Building Long-Term Resilience Against Supply Chain Volatility

Supply chain disruptions aren’t going anywhere. As manufacturers expand their supplier networks and navigate global logistics, the potential for disruption only increases.

That’s why long-term resilience requires a stronger back-office operation. AP automation provides that by making finance teams more agile, responsive, and proactive.

When disruptions occur, manufacturers using AP automation can:

• Fast-track payments to secure critical materials
• Reroute supply chains without AP delays
• Capitalize on new supplier opportunities quickly

According to Advanced Manufacturing, companies investing in automation gain not only improved efficiency but also greater supply chain resilience—key advantages in today’s volatile market, setting the stage for long-term success.

Why onPhase Is the Solution for Modern Manufacturers

At onPhase, we know how high the stakes are in manufacturing. One delayed payment can ripple through your entire supply chain—halting production and straining supplier relationships.

Our AP automation and payments platform is designed specifically to help manufacturers navigate supply chain complexity. By streamlining invoice processing, providing real-time visibility, and enabling fast, accurate payments, onPhase keeps production lines moving even when the unexpected happens.

When supply chains are unpredictable, your AP process shouldn’t be.

With onPhase, manufacturers can build resilience where it matters most—keeping production running, suppliers happy, and cash flow steady.

Don’t let AP slow you down. Schedule a demo with an onPhase automation expert today and keep your operations moving, no matter what.