The Accenture report called “Gaining Competitive Advantage through More Effective Direct Material Sourcing”, details how many manufacturing companies face several internal challenges, including a willingness to collaborate and share information. Accenture states that depending on the size of the company, a change in corporate thinking is needed for a tier-one supplier to deeply engage with upstream offshore suppliers.
The paper examines the fact that while large companies may be accustomed to cross-border collaboration, medium-sized companies often lack the expertise to evaluate suppliers within best-cost countries and expand respectively. “As the number of players in the supply chain increases, so does its complexity. Often suppliers are scattered across a multitude of countries—or continents. High-performing, tier-one suppliers manage the complex supply chain effortlessly with information sharing — both upstream and downstream. The ability of suppliers to share information along the supply chain will remain a main differentiator for procurement excellence.”
Arena offers a suite of solutions and functionality that make an OEM’s supply chain unbreakably strong. Purchasing teams who were once blind to part pricing and component availability can now better see over the horizon line, thanks to these tools, which include the following:
Arena’s Supplier Item Lookup (SIL) – Available with Arena PLM BOMControl, SIL searches manufacturer part information requirements in component databases, such as Octopart and SiliconExpert, and presents the results directly in Arena PLM. The BOM Lookup view displays current availability from authorized distributors and provides access to datasheet and compliance documents.
Arena Exchange – Provides OEMs with a secure, flexible environment for collaboration with multiple users at all supplier levels throughout their global supply chain. Arena Exchange enables OEMs to share critical PDX documents, at no cost to the receiver, with their primary supply chain contacts without needing to grant their contact’s teams direct access (login) to their PLM solution’s IP. And this solution is agnostic, working with any PLM solution.
Arena Exchange eliminates the burden of manually sending product record documents via email to each and every one of their own supply chain contacts. Exchange allows supply chain teams to share and socialize the original product record by posting it on a single social platform that can be reviewed by all supply chain tiers and all relevant personnel at each supplier. And Arena Exchange offers procurement managers visibility into their suppliers’ suppliers.
As product designs today are becoming more sophisticated with complications, such as customization or regulatory specific demands by region, it affects manufacturing. As a consequence, leveraging volume pricing becomes a challenge. Companies want to manage their supply chain networks to conserve cost, improve quality and be fastest to the market. No surprise here. The eyebrow raiser is that more companies aren’t taking advantage of this.
There is no doubt that changes in the global market have created an increased demand for a single holistic solution where procurement and PLM processes are integrated to better manage previously siloed processes.
A major point made by the Accenture report is that procurement risk management processes are important for critical for OEMs to react quickly to changes by having relationships with suppliers with a track record of delivering low cost parts on time. “Suppliers should actively manage their own suppliers, develop non-exploitive close collaboration with them and build on common values.”
The paper continues, “By doing so, tier-one suppliers have the best opportunity to reduce supply risks to the benefit of both parties and achieve an optimal cost-benefit ratio. In addition, the quality and price of the end product are likely to improve since trusted tier-two suppliers will be involved in choosing the raw material mixture, and the supply chain will be stronger, giving suppliers a key competitive edge.” To learn how Arena’s solutions help OEMs maximize procurement success, please click here.