If only I could see… The global supply chain was historically the place to be blamed for inefficiency and vulnerable to disruption. It is usually a place with the biggest amount of legacy systems or inefficient homegrown Excel spreadsheets. The supply chain information is prone to be fragmented and disconnected into silos from production planning and even more from engineering and product development organizations. At the same time, the last has the biggest impact on product decisions and information about products and their components. The visibility and transparency between them are problematic, to say the least.
Covid19 this year was disrupting the economy, causing significant supply chain disruption causing delays and changes in product development, manufacturing, and product shipments. It is a wake-up call for all inefficiency in the supply chain and a perfect trigger to re-think how new technologies, systems, and processes can help to increase transparency and automation in the supply chain and logistics space. The question of what tech and systems can increase supply chain resilience and help manufacturing companies to be better prepared in the event of supply chain and manufacturing failure.
A common definition of supply chain visibility is the ability to track materials and components from original suppliers and manufacturers through the manufacturing facilities and customers. In an ideal situation, the company should have detailed information about orders made in purchase and procurement and be able to trace them down through the chain. Unfortunately, very few companies can achieve real-time tracking because of high levels of complexity.
Although the supply chain visibility can be different between various industries. Some companies and industries need to track individual components and some others need to track the batch levels. The diversity of products that are similar, but not identical creates another level of complexity For example things like trim and color creates a great level of complexity. In many situations, the visibility should go much beyond tier 1 and tier 2 suppliers, which can allow you to identify how a specific incident or disaster can affect and impact your supply chain.
What can affect or improve your ability to reach supply chain visibility?
One of the biggest problems with supply chain visibility is to get the information together in the right format and place. If your company wants to address the supply chain holistically, the first step to start with product information. This is a place where the first disconnect is possibly happening. Tracking products through a network of siloed tools is a challenge. And PLM as the first tool in this network can be a significant source of the problem or positive impact depending on how you see it. While love for PLM systems usually drops significantly when you step outside of an engineering organization, it is a place of the first disconnect. Multiple ERP and operational systems can play another role in this disconnect. The information needs to be actionable and available in real-time. Which means to have information about products on the customer side is another place of disconnect. Add to this that the information needs to be available not only in the Excel report sent to the company CPO but also to all people in the organization and you have a perfect recipe for supply chain visibility disaster.
So, what to do?
Modern data management technologies, cloud, SaaS, IoT, and related analytical software can become a way to eliminate failure and improve visibility. How to pull them together? It all starts with the organizational goals and ability of the company to break “silo thinking syndrome” and create an overall strategy. However, the strategy is not enough. Reliance on old fashion legacy tools and homegrown solutions can slow you down. Here are 3 technologies how I believe modern systems can provide to increase supply chain visibility and de-risk a potential failure of your operation.
1- Product Information availability and direct connection and interfaces with contractors and suppliers. Modern multi-tenant SaaS data management tools can provide a foundation for product information, suppliers, contractors, and customers to be connected into a single product information network. Having data online and connected is key. Old fashion legacy databases are just too siloed to support real-time network visibility.
2- Using IoT technologies to track the visibility of customer products, suppliers, warehouses, components, and related pieces of data. While you can get information from suppliers and logistic companies, having direct IoT tracking can be the next level of tracking and connecting directly into a product information network using modern SaaS PLM technologies. In addition to that, having IoT devices monitoring multiple data points such as environment, shock loads, temperature, humidity, and many others will allow us to make all the data connected.
3- Advanced analytics is the third important component of the overall system improving visibility. The information provided by transactional systems like ERP and CRM is usually not sufficient to pull the entire visibility network. PLM systems have the advantage of having an entire chain of data in the Bill of Materials representing components from OEM, Tier 1, Tier 2, and even lower. Having this information combined with other data sources, companies in real
What is my conclusion? If only I could see… Supply chains are complex and current IT architectures are old, monstrous, and outdated. In my conversation with customers about PLM strategies, I usually speak about data flows and data handovers. The most shocking experience is to discover the data handover flow. Usually completely underestimated by management, they are usually super surprised at my finding of disconnected points, documents, interfaces, and systems. I cannot share customer data on my blog but typically companies are running between 50 to 100 disconnected sources – documents, databases, systems, and what else. To improve visibility in product development and supply chain companies need to move into connected systems capable of providing visibility and intelligence. It is very hard to do with systems that don’t have a network layer designed bottom-up. Guess what? All existing prem PLM systems are like these siloed SQL databases running separately. It is time to rethink technology and to consider resilient data management, multi-tenant SaaS systems, and advanced analytics. Just my thoughts…
Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network platform that manages product data and connects manufacturers and their supply chain networks.