Outsmart Disruption: Design-driven Supply Chain Resilience
Full Transcript
Amanda Hosey
Hello everyone and welcome to today’s webinar, Outsmart Disruption: Design-Driven Supply Chain Resilience. I’m your moderator, Amanda Hosey, and joining me for this 30-minute program is George Lewis. George serves as the Vice President of Product Strategy for Arena by PTC. He has more than 20 years of experience in product lifecycle management and quality management systems with tenures at Oracle and Propel PLM, among others.
George holds a bachelor’s degree in mechanical engineering from the University of Akron. If you have questions for George, please send them through the Ask a Question box and we’ll address as many as possible at the end of the program. Now onto the presentation. Welcome, George.
George Lewis
Great. Good afternoon, everyone, and welcome to today’s session on Outsmarting Disruption: Design-Driven Supply Chain Resilience. I’d like to start by asking a simple question, how many of you had a global pandemic in your 2019 risk strategy?
That’s a little bit of a joke, but that’s what I thought, right? None of us had that on our game plan. In fact, I mean, think about where you were at when you found out about the pandemic. I certainly do. And I recall thinking, oh my goodness, what are we going to do? And that’s part of the shakeup that is supply chain disruption, I’d say in general. I mean, we’ve all been there, and we’ve had recent events that are quite similar to that where, “What are we going to do as a business with this new challenge that’s in place?”
And so the past few years have really exposed a hard truth, and even the most sophisticated supply chains in the world are highly vulnerable to sudden, unpredictable shocks, right? We’ve seen it before from port closures and semiconductor shortages to raw material constraints, geopolitical shifts, and of course fluctuating tariffs.
And let’s not forget the rise in extreme weather events and cyber threats. The reality is, and I think for all of you on this call who’ve dealt with supply chain, there’s always something happening in the supply chain that’s unpredictable and difficult to sometimes manage. And so many of these events are way beyond our control. But what is within our control is how we prepare, respond, and potentially even design for resilience. And I think that’s something we’ll talk about today. This isn’t just about reacting to problems, it’s about rethinking about how we build our supply chains from the ground up, and that means shifting from reactive to proactive strategies, from rigid to adaptable systems, and from siloed thinking to design-driven resilience.
And so today we’ll explore key approaches, technologies, and mindsets that can help organizations not just survive, but thrive in the environment of constant disruption. And so before we dive in, let’s take a quick poll. And so, this should come up momentarily. Which of these challenges have you encountered in the past six months? We’ll give it a few moments and let people respond here. The variety of things on the list here, I know we’ve probably all experienced these over time and probably in the past 10 years we’ve seen a little bit of every one of these things; at least in my experience, we certainly have.
And so I’m curious to see what folks think here. And so I’ll give it a couple moments. I know tariffs are certainly top of mind for everybody. That’s probably died down a little bit. I know as of six months ago, everybody’s panicked by the tariff situation. I think panic has subsided a little bit, but I’m kind of curious to see what else folks might be thinking about here. All right, so we’ve seen some answers posting here. All right, so taking a look at the spread here, tariffs is certainly top of mind.
It’s not actually as high as I thought it might be, but it’s certainly top of the list. Material or product shortages, kind of a blend across multiple things here. Regulatory compliance is very interesting, especially for organizations shipping to the EU, that is actually something we hear about frequently in my line of work is, “How do I keep track of all these regulations?”
And then the other one, probably number two or three, is supplier quality issues. I think that’s a historic challenge, although as you’re maybe adopting new suppliers and trying to qualify new suppliers to face current challenges, I think supplier quality issues is always one of those things top of mind.
What’s interesting is all of these got a vote. I’d be really curious to hear more about the “other,” if you would care to post it in the chat, please do. I’d love to know what some of those other things are. But pretty widespread with tariffs still being very much top of mind, almost 25% of people thinking about tariffs these days. And so I guess in going back and thinking about some of the folks and customers that I’ve talked to recently, there are a number of stories that I’ve heard about organizations and the challenges that they’ve faced.
Some of these organizations were really around the pandemic, but moving beyond the pandemic, it was really around mitigating potential supply chain issues. One of these companies actually went so far as to design in alternate chip sets to provide more flexibility downstream. And that’s some of what we may talk about here later in the session, is really just the idea of shift left. For those of you that haven’t heard of “shift left,” I think most have, but the idea that, spend a few more cycles early on in development such that you can think about potential manufacturability issues and supply chain issues, and potentially spend that time to think about how to mitigate it a little bit.
Going slow early sometimes helps you go fast later or at least mitigate risk later on in the development process. Another company that I talked to was actually using novel ways of mashing up data across the organization to look for risk in the components and subassemblies in their overall design. And so each of these organizations has looked at a variety of ways of mitigating risk. But I’ll stop there. I know we’re going to dig in more on that as we move forward. Amanda, any questions?
Amanda Hosey
Yeah, George, I have a few questions here for you. First off, I’d like to ask you what do you see as the top mitigation strategy here?
George Lewis
No, that’s a great question. I kind of mentioned some of them, but I would say there’s probably a couple. First top mitigation strategy, and many organizations already do this, but I would say it’s kind of shifting as to what department’s responsible, is just multisourcing. Certainly, having multiple sources helps you mitigate risk and improve resiliency by having alternates available. But I would say over the past five and 10 years, especially here more recently, this has especially shifted left again earlier into development.
And I would say even engineering has become more and more responsible for selecting multiple sources. Historically, it was always a procurement and sourcing problem like, hey, we’ve finished the design, let’s hurl it over the wall and it’s somebody else’s problem to figure out, where now it’s actually an engineering problem in that if I’m going to improve resiliency of my design, I really need to have multiple sources identified as early in design and development as possible.
And so that’s the idea of shift left, is that’s falling more and more on the early development process. This is select multiple sources. Secondarily, along the same lines is just better collaboration in general with the supply chain in particular. And so going back many years, for those of you that have been in the industry for a while, we always included the supply chain at some point, but usually it was when the design was done—again, throw it over the wall, let the supplier figure it out, we’ll work with them and maybe we fly overseas somewhere to help ramp up manufacturing.
But here more recently in talking to customers of ours, it’s heavily become focused on collaboration very early in development. And so again, the idea of shift left, right, in those earlier stages of development I probably want to get DFX design for excellence. I would say manufacturability has always been a focus there, but designed for manufacturability, designed for resilience with your strategic suppliers, and so actually including them in your discussions and maybe even including them in your business systems.
So if you use a product lifecycle management solution, or a quality management solution, or even a supply chain solution for your strategic partners, have conversations early about, I mean, contracts, relationships, all those things, but also begin to actually include them in design decisions early on because that can actually have a big impact on your flexibility further downstream. So when you go to build the product, having more flexibility built in from the suggestions of your strategic sources can help you mitigate risks at a later stage. And that may be very simple things like just simple design tolerance changes or component selection because of availability in their own experience.
And when it comes to availability in their own experience, this is another one of the areas where there is an opportunity for you to dig down a little bit more. And Amanda, I think that kind of builds into our next question here. So go ahead.
Amanda Hosey
All right, yeah, thank you so much for that helpful information, George. I have one more question here before we move on. Is there anything specific to the electronic supply chain that we should know?
George Lewis
Yeah, for electronics, and I know this affects more and more of you as electronics have proliferated all the products, especially in the automotive sector. Electronics are certainly a key aspect of what we’re all dealing with. And there’s specific challenges with electronics. A company I talked to recently at one of our customer dinners was telling me about, well, they don’t worry about their print circuit board assembly because they hurl it over the wall and that’s the supplier or the contract manufacturer’s problem to deal with.
And so I was asking them about some of those components on their printed circuit boards and how do they mitigate risk associated with those components? And there wasn’t a good answer. I think this professional thought about going back and looking more closely because a contract manufacturer may screen some of those printed circuit board assemblies early for you, but it’s not usually an ongoing process.
So to answer Amanda’s question, I think tools and data really play a key role here. And so the idea that you probably already have lots of data, bringing tools to bear that can help you identify risk and mitigate that risk in that information. And so I mentioned an organization that mashes this information up in a cloud of information and they pull in information from outside sources like availability information. There are vendors that’ll provide you just general availability information, some of very high-end solutions for doing some of these things. And they mash it all up, analyze the data, and look for risk. Well, not all organizations have a system or a team of people that can do these things. And so I’d say for organizations that are large, midsize and smaller that don’t have a team that does these things, is look at tools that can help you do these things to help you analyze your data and look for risk.
And ideally that should be integrated into the tool that you’re using to make business decisions, right? So be it an ERP, a product lifecycle management, or a quality management solution, the idea that your technology can help you identify risk and point it out for you by mashing up information about availability.
And to be clear, what I’m talking about is information from tools like a SiliconExpert and the Curist or an Octopart, things like that. There are many solutions and there’s many on the higher end, but actually bringing that in so you get better visibility. And if you don’t have teams that are focused on these things, there might be a person or nobody at all.
If you’re able to bring it into your solutions, you’re effectively democratizing information, such that individuals like engineers can make better decisions about component selection, maybe even specifying alternate sources for the same component, or even seeing risk in real time associated with those components when decisions are being made in that business system.
And so I think this is a great opportunity for organizations to look for efficiencies. We can’t always hire additional headcount, but with some of these technologies you can bring in, you can actually make your headcount more efficient and able to look for risk and create more product resilience by having that information at the point at which a decision is being made.
And so let’s move on here and see if any of you are using any of these strategies. I think we have another poll lined up here. It might take a moment or two for this to pop up here. Yeah, so you should see a poll just along the line. I’d be curious on this particular poll, for those of you on the call, who’s using technologies like outside data sources to look for risk in your bill of materials? That’s a very clear way to put the question.
Many organizations haven’t historically focused on this, especially on the engineering side. But for those of you on the call here today, especially engineers, I’d be curious, does your organization have a way for you to get better visibility into risk associated with your bill of materials while you’re designing? All right, so this is a simple yes/no. I probably should have put a “maybe” in here and an “other,” so you could post thoughts in the chat here. But we’re actually seeing a spread of most people don’t have solutions. It’s a 60/40 kind of spread here, or most don’t have that technology.
And I think this really represents an opportunity. The spread’s actually getting bigger as I talk. This is an opportunity though for organizations to look at some of those technologies, especially as it relates to electronic components. There are technologies out there that can help. And I do know there are even technology vendors, PLM solutions, that can even help you provide this information inside the tool that you’re using to design products so you can actually see some of that risk directly inside your product while you’re making those decisions.
Again, we might call that a shift left approach to design and development. All right, so moving on from that. I don’t think there’s any shocks there, but I think what we’ve learned here on the call is there’s opportunity.
If I circle back a little bit and talk about the basic things or the top mitigation strategies, it would be multisourcing. And that’s something that we all can do, is looking for alternate sources. You can certainly go in and specify those things. If you have a technology that you can bring to bear to help you do that, so much the better. Not only to specify multiple sources, but to help you look for risk inside your bill of materials. And then secondarily was collaboration.
And so for those of you that don’t have those tools or haven’t selected one yet, just seek to collaborate better with your partners, especially your strategic partners like your contract manufacturers, to have that collaboration early in design and development. So you can look for risk. Design for manufacturability, sure. I might say there’s a DFR element designed for resiliency that we’re starting to see now in most organizations, especially since the pandemic, where, hey, I want to actually design to make sure this thing’s flexible.
So if I have problems in my supply chain later, we’ve got that flexibility built in. And so I would encourage all of you to take a closer look at some of those things, technologies that you bring to bear, and then secondarily, closer collaboration with your suppliers. You’ll need technology to help enable that. And by the way, closer collaboration with suppliers. I don’t mean just picking up the phone or connecting on a Zoom. Consider adding them to your enterprise systems where appropriate.
Especially a quality management or a product lifecycle solution where you can actually work with them on a peer-to-peer basis on your design and get real-time feedback on what they think about what’s going on. And certainly Zooms and phone calls all play a role here too, but certainly consider technologies that can help enable some of these things.
And so with that, we’ve got about 10 minutes to go. Why don’t we open it up for Q and A at this point. Amanda, can you take a look to see what questions we might have?
Amanda Hosey
Yes. And thank you so much for all of the wonderful information, George, we appreciate it. And those of you in the audience, you can still submit questions for George using the Ask a Question box on your screen, but we do have several already.
And so first up, George, are companies’ operations really impacted by electronic component issues?
George Lewis
Yeah, well, I had say not just coming from me, but actually my company recently did a survey across high-tech companies, across industries even. And it showed over half the organizations had been impacted by component issues specific to electronics. These components aren’t always like the CPU or the chip sets, things like that. It’s oftentimes like a resistor or a capacitor is no longer available. And in those situations you’re stuck with reacting to a problem in real time.
And in a situation like that, if you had alternate components specified or if you had a flag that went up in your business system that said, “Please take a look at this component, it may be unavailable soon.” That’s the kind of proactive information that helps you make a better decision. But yeah, lots of organizations are facing these things and in fact, since tariffs and all these things started begin to happen six months ago, we get lots of questions about what’s going on and how can I help mitigate risk.
Amanda Hosey
All right, great. Thank you so much. Next up, will designers just see this as more work on their plates?
George Lewis
Well, I suppose they may, but the reality is if you’re able to build more flexibility in early in design, you’re not going to get bothered as much later. The ideal situation for most designers, I mean, myself included when I was designing product, was, hey, it’s awesome, as part of the design stage, I want to get this really cool thing out the door.
And sometimes it can be annoying when people are bugging you later because you want to move on to the next great thing. If you’re able to build more flexibility into your design, you’re not going to get bothered as much later. So you don’t have to go back and fix old design so much.
If you have that design for flexibility built into your products, where in the past somebody would come call you up and say, “Hey, we’ve got a problem,” and then you have to drop everything and go do a bunch of work to mitigate a problem with the product. Where now, again, shift left, a little bit of time spent early, making the design more flexible can pay dividends down the road in that you’re getting fewer phone calls about how to change the design to deal with a risk or a problem in the supply chain.
Amanda Hosey
All right. Thank you, George. Next, someone asks, how often do engineers need to make changes due to electronic component availability or other issues?
George Lewis
Yeah, so that’s a good one. In that same survey, responders pointed out that it happens frequently, 15% of the time, occasionally 60% of the time. And the combination of those two is 75% of the time it’s happening, that component availability is shifting on the fly; especially now in the past few years, it really has changed quite a bit and most people that we’ve talked to are experiencing that on a daily basis or a weekly basis, perhaps.
But they’re always looking for ways of mitigating that. And like I said early in the conversation today, organizations are looking to mitigate that earlier. It’s not just a purchasing problem anymore, it’s actually becomes an engineering problem. And what can we do to specify an alternate component? So it’s happening very frequently, and if you’re one of the folks seeing it, that’s not uncommon at all.
Amanda Hosey
All right, thank you, George. Next, someone says, we don’t have a way to see risk in BOM. Is that possible?
George Lewis
Yeah, so there’s a variety of ways to look for risk in a bill of material, right? Most conventional tools aren’t going to bring in information about risk in your bill of material unless you’re able to pull in outside information to help you with that.
One answer might be is look to your supply chain to begin to help you there. So include the supplier so they can give you feedback on what else you might do in that bill of material. But I think one of the other key parts of the presentation here today is that there are technologies that can help you. So you could upload that bill of material to a variety of tools online to look for risk in that bill of material. Although that gives you information only at the point at which you upload it. Best-in-class solutions will provide that information in real time for you.
And so if you look at your technology vendor, like a product lifecycle management solution, even some of the EDA tools, the printed circuit board design tools, what can provide some of this information in real time, such that as you’re making a decision, you’re seeing that information and going beyond just looking at it in real time.
It’s about ongoing notification. So here’s my bill of material. Well, what’s happening today may change a week from now, a month from now, or six months from now. Class-leading technologies can actually help you make those decisions or provide that visibility and then make decisions based upon that information that you’re being provided. Or if you don’t have that kind of technology, you’re effectively blind and it’s hard to see those risks that are coming your way.
Amanda Hosey
Well, we’re almost out of time, so George, is there anything else you would like to add or reiterate to the audience? Oh, we have one more question here that says, how have you seen clients or product companies collaborate with suppliers?
George Lewis
Right. Right. So there’s a variety of ways, obviously, and I think many companies lean on Zoom meetings and web meetings and all these things and email to collaborate with their suppliers. The best-in-class companies out there include them inside their business systems.
So rather than email somebody a bill of materials or email somebody a bunch of drawings, include them in your technology solution that has this information. It’s probably a PDM or product lifecycle management solution where you’re actually enabling peer-to-peer collaboration inside that solution.
And the beauty there is it’s contextual, right? It’s not just an email that shows up and gets ignored. It actually shows up inside your technology like, well, hey, vendor XYZ is providing you this feedback on this design. You can respond in real time either through a chat-like interface like you might in Slack or Teams, or through more formalized workflows like a quality workflow to help streamline communication and collaboration.
I would say context there is really what’s important because now you’re talking in context of a part, an assembly, a printed circuit board assembly, and that really makes all the difference in the world to really drilling down to the specifics of how to reduce risk or how to improve that design even for manufacturability.
And so include them in your technology where appropriate. There’s a variety of solutions out that’ll allow you to do that, but I would encourage folks to investigate that. The idea is really also is just asynchronous design there, by the way.
If you’re working with organizations overseas, oftentimes it’s difficult to collaborate in real time, right? It’s first thing in the morning, or it’s at the end of the day, U. S. time, depending upon what region you’re talking to. Many of these tools can enable asynchronous collaboration, where they can respond when appropriate for that organization, and it creates more seamless collaboration, right?
Things don’t fall off the radar because you forgot about them. It’s actually inside your tool. When they wake up in the morning, they can see your comment sitting there and respond to it. And so again, coming back to summarize that, it’s really about technology. Look at your technology to help make you more efficient and reduce risk in your organization.
Amanda Hosey
All right, thank you for all of that, George. Unfortunately, that is all the time we have for questions today, but I would like to thank George Lewis as well as all of you in the audience for joining us. And thanks everyone who submitted questions.
We’ll provide George with all the questions that came in for follow up later. In just a moment, you’ll see a survey pop up. Please tell us what you thought of this program by answering three quick questions. Today’s webinar will be available on demand for the next year, and you’ll be emailed a link to the recording. Once again, we thank you all for watching.