How to Win With Collaborative Supply Chain Partnerships

Long gone are the days when engineering or operations teams would walk down the hall to review materials on the factory floor and prepare for an upcoming build. Today many original equipment manufacturers (OEMs) are moving away from in-house production and outsourcing their work to manufacturing partners. Outsourcing helps organizations reduce overhead costs, stay focused on their core competencies, and tap into their partners’ resources and expertise. To sustain this new business model and outpace the competition, companies must rethink how they interact with their suppliers and contract manufacturers.

In this post, we discuss the importance of staying connected with your supply chain partners throughout the entire product development process. We also explore how cloud product lifecycle management (PLM) and quality management system (QMS) solutions support different supply chain relationships while protecting your intellectual property (IP).

SUPPLY CHAIN COLLABORATION ENHANCES EVERY PHASE OF NEW PRODUCT DEVELOPMENT

Regular communication with supply chain partners is critical at every phase of new product development, especially amid constant disruptions and increasing customer demands. Keeping the lines of communication open gives everyone full visibility into potential production snags or quality concerns. The sooner you can find and fix issues, the shorter your time to market.

Development and Prototype Phase: Optimize Design for Manufacturability (DFM)

In this early stage, the product exists as a digital record comprised of 3D CAD designs, bills of materials (BOMs), approved manufacturer/supplier lists (AMLs/ASLs), and other supporting documentation. Engineering and operations teams gather input from partners to help optimize design for manufacturability and design for supply chain. They can easily implement design changes with no impact to tooling and material costs.

Limited Production (Pilot) Phase: Mitigate Volume Ramp Risk

Running small volumes helps to limit scrap and rework costs. Internal teams and partners can troubleshoot manufacturing issues and mitigate volume ramp risks. Activities during this phase include:

• Verifying availability of off-the-shelf (OTS) parts with suppliers
• Determining whether the manufacturer’s custom parts meet specified tolerances
• Identifying alternate tooling and fabrication methods
• Ensuring parts and materials meet cost, quality, and regulatory (e.g., RoHS, REACH) criteria
• Revising product documentation (specifications, work instructions, validations) to meet quality requirements

Full Production Phase: Reduce Cost of Goods Sold (COGS)

During full production, the goal is to increase yields and reduce cost of goods sold (COGS). Engineering, operations, and supply chain partners continue to work together to refine the build and control costs, while resolving issues as they surface.

Ultimately, engagement with supply chain partners early and often throughout the product development process helps companies gain first-mover advantage and set a competitive market price.

WHY PHONE, EMAIL, AND FAX DON’T SUFFICE

The way you collaborate with suppliers and contract manufacturers is just as important as the frequency. Typically, product teams correspond with their partners through phone, email, or chat apps. Product information is often scattered across multiple systems (e.g., CAD, spreadsheets, on-premises PLM, ERP) while build packages are transmitted to partners using packaged mail deliveries, fax, email, or FTP folders.

Without a secure, unified system to access and exchange information, OEMs cannot maintain control of their product record and keep track of the latest changes. What’s more, teams lack the visibility necessary to resolve issues quickly. Organizations end up with inconsistencies and errors that lead to increased scrap and rework costs, product defects, and shipment delays. Companies also run the risk of exposing their critical intellectual property (IP).

SECURE, REAL-TIME COLLABORATION WITH CLOUD PLM AND QMS

Cloud-native solutions like Arena PLM and QMS strengthen supply chain relationships by providing a single source of truth for product teams and partners to securely access information and collaborate in real time. Arena’s multilayered security framework includes multiple firewalls, data encryption, secure APIs, and two-factor authentication—all designed to protect your sensitive IP.

Setting Up Product Teams and Partners for Success

Using Arena’s precise access controls, you can configure suppliers and contract manufacturers to see only the information that is pertinent to their organization and role. Additionally, you can invite them to participate in specific activities within the Arena workspace.

When configuring suppliers or CMs within Arena, consider your current business relationship:

• What part of your product do they manufacture or provide?
• How do they participate in the product design and development process? Will they share files, review and approve engineering change orders (ECOs), or just provide informal input?
• Which information should be visible (public) or not visible (private) to partners?
• Will they initiate or participate in quality processes (e.g., supplier corrective action)?
• Who needs training on the latest work instructions, standard operating procedures, etc.?

These factors will help you determine the appropriate access levels and restrictions for your various supply chain partners.

BOTTOM LINE: COLLABORATION IN THE CLOUD IS KEY

A collaborative supply chain partnership is more critical than ever in today’s competitive and disruptive environment. Companies must engage with their manufacturing partners throughout the entire product development process to speed time to market and increase profitability. By leveraging a cloud-native PLM or QMS solution like Arena, you can keep your partners involved in critical design and development processes while securing your IP.

Explore Arena’s advanced supply chain collaboration capabilities. Watch our demo.