3 Important Supply Chain Lessons From Leading Manufacturers
The effectiveness of a supply chain can make or break a business. In recent years, manufacturers have experienced substantial supply chain disruptions, leading to material and labor shortages, quality issues, product delays, and low profit margins. Results from an Accenture survey indicate that these disruptions ultimately caused companies to miss out on 7.4% – 11.0% of potential revenue growth1.
In response to these setbacks, many organizations are prioritizing supply chain management and implementing measures to make their operations more resilient and efficient. In this article, we showcase five leading product companies that excel in supply chain management and share valuable lessons your business can learn from them.
COMPANIES LEADING THE WAY IN SUPPLY CHAIN OPTIMIZATION
Eliminating Build Confusion and Errors Among Supply Chain Partners
Markforged® delivers on-demand industrial production through their additive manufacturing platform, The Digital Forge™. With a rapidly expanding product portfolio, the company needed to consolidate their bills of materials (BOMs) and streamline the engineering change process to ensure that their contract manufacturer (CM) received accurate, up-to-date build information.
With the implementation of a cloud product lifecycle management (PLM) solution, Markforged now has a single source of truth to manage the entire product record and implement changes. Additionally, they collaborate more frequently with their CM. Engineers can verify each product revision they send to the CM without confusion about which version is correct. This has reduced scrap and rework, saving the company considerable time and money. Jon Bond, Director of Mechanical Design at Markforged noted, “Having better communication helps us understand what things should be released and ensures our CM has the most accurate information. And, if we’ve made a mistake, we know that too and hopefully prevent it from happening in the first place.”
Managing product changes and sharing information with supply chain partners also proved to be problematic for Nutanix, a leading developer of distributed hybrid infrastructure platforms. Nutanix outsources all its manufacturing to suppliers, CMs, distributors, and technology partners. Initially, they used spreadsheets to maintain their BOMs. With multiple copies of the same BOM floating around and multiple people making changes, they encountered build errors that led to costly scrap, rework, and shipment delays.
The transition to cloud product lifecycle management software enabled Nutanix to gain full control of their product record and ensure that their supply chain partners always work from the same BOM revision. Ultimately, they reduced scrap, eliminated product errors, and accelerated time to market.
Accelerating New Product Introduction Through Enhanced Supply Chain Collaboration
congatec is a rapidly growing technology company focused on embedded computing products. The company’s high-performance computer-on-modules (COMs) are used in a wide range of applications and devices including industrial automation, medical technology, transportation, and telecommunications. In its early startup phase, congatec relied on several ad hoc systems to manage product information. This made it difficult for product teams and supply chain partners to identify the latest revisions.
Since transitioning to a Cloud PLM solution, congatec leverages the system’s secure supplier access to quickly release the final product BOM to suppliers and EMS partners for production. With automated revision controls and changes applied to the product BOM, they are confident that everyone is always accessing accurate, up-to-date information.
“Our supply chain partners’ ability to easily retrieve our product BOM from a secure PLM system and integrate it into their own system saves them considerable time and helps speed the production process.”
—Joerg Grudzinski, Director of Global Operations, congatec
Nextracker, a Flex Company, is globally recognized for delivering intelligent and connected energy systems for over a thousand solar power plants worldwide. Early on, the company experienced similar issues to congatec, lacking a single source of truth to manage product information and drive transparent processes across internal and external teams.
By adopting Cloud PLM technology, Nextracker enhanced collaboration between product teams and supply chain partners. The technology also facilitated seamless integrations with their design and enterprise resource planning (ERP) systems. Ratana Lee, Senior Manager, NPI Master Archivist at Nextracker noted, “We can pass information instantly from our engineering systems to PLM and then to our manufacturing systems to expedite end-to-end new product introduction processes. We always get positive feedback from our suppliers on the ability to check drawings and revisions, compare against POs or sales orders, and start work without delay.”
Streamlining Supply Chain Operations With PLM and Sourcing Platform Integration
Digi International (Digi) provides IoT connectivity products, services, and solutions for a wide range of industries and applications, from enterprise and industrial to transportation and smart cities. Like most companies in the fast-paced electronics industry, Digi had difficulty aligning their engineering, sourcing, and supply chain operations. Engineering teams used Arena PLM to manage BOMs while supply chain partners used Part Analytics to manage sourcing information. This resulted in information silos, manual data entry errors, and ineffective collaboration among product teams and external partners.
After integrating Arena and Part Analytics, Digi experienced notable improvements in operational efficiency, decision-making accuracy, and cross-functional collaboration.
Improved outcomes include:
- Enhanced collaboration with external supply chain partners
- Efficiency gains upwards of 50% through real-time accessibility across internal and external teams
- Greater team-wide visibility across the entire product lifecycle
- 2x faster request for anything (RFX) cycles
- Additional cost savings stemming from insights into component availability, lead times, and usage
3 KEY TAKEAWAYS FOR TRANSFORMING YOUR SUPPLY CHAIN
These companies illustrate the importance of driving controlled, connected, and transparent processes across the supply chain. Here are three important lessons you can take away from their experience to ensure supply chain success:
- Work Collaboratively
Solicit design input from manufacturing experts—your suppliers and contract manufacturers—early and often throughout the product development process. Their expertise is invaluable in helping you mitigate supply chain risks and meet your quality and cost objectives. - Embrace Information Systems
Invest in a proven Cloud PLM or QMS solution to gain control of your product record and drive real-time supply chain collaboration. Ideally, the solution should provide your suppliers secure, real-time access to product information, enabling them to participate in formal change reviews or provide more informal feedback. Additionally, it should link engineering changes and supplier information directly to the product BOM to ensure stakeholders gain visibility into quality issues or potential production snags. Lastly, the system should offer robust analytics capabilities to help you monitor supply chain performance and drive continuous improvement. - Leverage Enterprise System Integrations
Connect your existing supply chain management system with enterprise solutions like PLM and ERP to gain greater visibility, enhance operational efficiency, reduce costs, and improve decision-making throughout the product lifecycle.
By adopting these business practices, you can build an agile supply chain that drives continued growth and profitability.
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References
Shelly St.Hill