How to Thrive in Turbulent Times

Cloud Solutions Fuel Success to Overcome Any Disruption and Thrive Anytime

GETTING AHEAD OF UNFORESEEN EVENTS

Despite the disruptions and challenges facing most manufacturers today, they still need to innovate rapidly and gain a competitive advantage. For many, the key to success will depend largely on whether they can implement effective strategies and digital technologies to manage supply chain risks and drive greater operational resilience.

WHY SUPPLY CHAIN RISK MANAGEMENT (SCRM) MATTERS

Effective SCRM provides organizations with the insights they need to respond quickly to disruptions, maintain continuity, and minimize financial losses.

 Key Elements of SCRM

ADOPTING THE RIGHT SCRM APPROACH

A successful SCRM strategy requires thoughtful planning, dedicated resources, and flexibility. Here are some strategies that companies are adopting to better navigate today’s volatility.

• Design for Adaptability (DfA): Building flexibility into product designs and processes so that they can be easily modified or reconfigured in response to unforeseen disruptions, shifts in demand, supplier issues, or regulatory changes. Modular designs allow for easy substitution of components and materials. Flexible manufacturing processes enable you to scale production up or down.
• Reshoring or Nearshoring: Moving production closer to home to help reduce exposure to geopolitical instability, tariffs, cyber threats, and transport delays.
• Supply Chain Diversification: Spreading sourcing and manufacturing activities across multiple suppliers, regions, or transportation modes. The goal is to reduce dependency on any single source or pathway, thereby minimizing the impact of disruptions.
• Just-in-Case (JIC): Unlike the Just-in-Time (JIT) model, which minimizes inventory to reduce costs, JIC emphasizes holding buffer inventory, excess capacity, or extra resources to ensure continuity in the face of disruptions. Companies that are frequently exposed to long lead times (e.g., high-tech electronics) usually adopt this approach.
• Cost Optimization: Implementing various measures to control costs. This might include renegotiating supply contracts to lock in prices and avoid sudden rate increases or seeking lower-priced alternate parts that meet your quality criteria.
• Frontloading: Importing large volumes of goods ahead of anticipated tariff increases or trade policy changes. The goal is to avoid higher costs associated with upcoming duties. Companies with price-sensitive goods or products with long production cycles typically benefit from this practice. Potential trade-offs include higher inventory holding costs or cash flow strain due to large upfront purchases.
• First Sale: A U.S. customs rule that enables importers to base the declared value of goods on the price paid in the first sale of a multitiered transaction (e.g., from manufacturer to intermediary), rather than the final sale price to the importer. This can reduce duties and taxes if the first sale price is lower.
• Tariff Engineering: Designing or modifying products in a way that qualifies them for a lower tariff classification. It involves understanding the Harmonized Tariff Schedule (HTS) and structuring products to meet the criteria for more favorable duty rates.
• FTZ (Foreign-Trade Zone) Utilization: Using designated areas within the U.S. or other countries where imported goods can be stored, processed, or assembled without being subject to customs duties until they enter the domestic market. This can reduce or defer tariffs and improve cash flow.

These measures are not one-size-fits-all solutions. Hence, businesses must weigh the pros and cons to determine what works best for their unique situation.

IMPLEMENTING THE RIGHT TECHNOLOGY

Digital technology plays a crucial role in SCRM by providing opportunities for enhanced visibility and decision-making. Many manufacturers are now looking to implement more robust digital solutions that can help them improve collaboration across dispersed teams and proactively address the next wave of disruptions that come their way.

CLOUD-NATIVE PLM AND QMS DRIVE OPERATIONAL EFFICIENCY AND AGILITY

Enterprise product development solutions that are born in the Cloud address the challenges that today’s manufacturers face. More specifically, cloud-native product lifecycle management (PLM) and quality management system (QMS) solutions offer a single source of truth for organizations to maintain complete visibility into supply chain activities and other processes that are critical throughout new product development and introduction (NPDI).

Managing the Product Record in One Secure Place

By centralizing the product record, manufacturers can effectively manage and track product requirements, design changes, supply chain activities, and team deliverables to resolve issues quickly and meet their NPDI milestones. With everything housed in a secure cloud environment, companies don’t have to worry about losing critical product information—even if they relocate production facilities or change suppliers. Their intellectual property remains intact, and processes stay on track.

If your documentation isn’t updated and available in a cloud-based PLM system, you might end up moving a product that is not properly documented, which can cause major issues at the new facility.

—Wayne Miller, Supply Chain and New Product Introduction Expert

Source: Changing Your Contract Manufacturer?

Advancing Business Intelligence

Turning Product and Quality Information into Actionable Insights
Cloud PLM and QMS solutions can serve as powerful business intelligence tools, extending beyond the product bill of materials (BOM) to include engineering changes, requirements, corrective and preventive actions (CAPAs), training documentation, compliance records, and supplier information. This expansive dataset provides strategic insights that help organizations identify trends, resolve issues proactively, and drive continuous improvement across the product lifecycle.

Leading cloud-native PLM and QMS solutions like Arena include an Analytics platform with out-of-the-box and customizable dashboards to help companies easily monitor engineering change orders, supplier performance, quality events, and other key operational areas.

Arena Analytics has really helped identify the different types of bottlenecks in new processes that need to be improved. The ability to customize insights and filter them by various attributes—such as products, time frames, months, weeks, or quarters—ensures that the data remains relevant and useful for management teams at any given time.

—Wyatt Dincel, Configuration Control Analyst II

Turning Reactive to Proactive With Built-in Supply Chain Intelligence
Arena expands business analytics further by offering component risk identification and mitigation capabilities through its built-in supply chain intelligence (SCI).

Companies no longer must spend countless hours searching through multiple websites to source healthy electronic components for their products at a reasonable price. With access to real-time component information including alternative parts, compliance certificates, lifecycle status, and country of origin, organizations can build more flexibility into their BOMs and approved manufacturer lists (AMLs) from the start and enhance supply chain resiliency.

Arena SCI also performs continuous BOM health scans and sends automatic risk alerts to keep product teams informed of supply chain shifts that warrant immediate attention.

Our teams face constant pressure to move faster, even as supply chain challenges become increasingly unpredictable. We are seeking ways to help us stay ahead by identifying risks early and avoiding costly last-minute changes, so we can keep projects on track and deliver on time. We see Arena SCI as an opportunity to help achieve this.

—Dan Freeman, Director of Hardware Engineering

Enhancing Supply Chain Collaboration

Effective communication between original equipment manufacturers (OEMs), design partners, suppliers, and contract manufacturers is essential to optimize design for excellence (DfX) and ensure commercialization success. The ability to access current product information and collaborate in real time from any location will ensure that all impacted teams are always on the same page. Cloud solutions foster frequent, proactive communication to help circumvent manufacturing design issues, long lead times, material shortages, and other supply chain shocks, that often lead to product launch delays.

Ensuring Quality and Regulatory Compliance

If a product doesn’t meet today’s strict quality, safety, and regulatory compliance mandates, it will not realize commercialization success. Manufacturers must adhere to an ever-changing myriad of laws, standards, and regulations to sell their products globally.
The nature of compliance varies across industries and countries:

• Life Sciences and Medical Device Compliance: Companies that are subject to FDA (U.S. Food and Drug Administration), ISO (International Organization for Standardization), EU MDR (European Union Medical Device Regulation), and other key industry regulations can mitigate compliance risks by ensuring policy, process, and system adherence. For example, the FDA and EU MDR require life sciences companies to establish and maintain a quality system to ensure that medical devices meet all safety and performance requirements.
• Environmental Compliance: All electronics manufacturers must limit or restrict the use of toxic materials in products. This involves managing components and material compliance evidence for RoHS (Restriction of Hazardous Substances), REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals), WEEE (Waste Electrical and Electronic Equipment), and/or conflict minerals regulations.
• Export Controls: These vary by country. However, aerospace and defense companies that do business with the U.S. government or military are subject to International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR). ITAR- and EAR-related product data must be controlled, and, if exported, done so only with proper export licenses.

Cloud PLM and QMS solutions streamline regulatory compliance by providing a central repository for product teams and supply chain partners to compile all the necessary evidence. Through frequent communication and coordination, they can ensure that technical files, material declarations, validation reports, training records, SOPs, CAPAs, and other documentation are up to date. Having a unified system to manage, track, and access the latest information also provides greater visibility and traceability, thereby minimizing audit risks.

Powering Transparency and Resilience With Connected Systems

With Cloud PLM and QMS serving as the trusted source for managing design, supplier, and manufacturing information, companies can establish a digitally connected environment that fosters transparency and agility.

Integration with upstream and downstream systems—such as CAD, ERP, MES, and procurement platforms—ensures seamless data flow across the enterprise. This interconnected framework minimizes manual errors, enhances collaboration, and empowers teams to make faster, more informed decisions. Ultimately, organizations can move quickly from design to production and maintain momentum even amid disruption.