For many manufacturers, ensuring the security and reliability of their supply chains is a top priority these days. However, it is easier to say than do. Unless you lived under the rock for the last year, you’ve heard about supply chain disruption and how manufacturing companies on all levels are struggling to get products out of the doors. A couple of weeks ago, I was sharing my thoughts about how Tesla is leading the way to future supply chain and engineering intelligence. Check this out and draw your opinion.
Today, I want to talk about the advantages of a global PLM platform and how it can help to de-risk the supply chains and minimize disruptions that can happen because of suppliers’ unavailability, components shortage, and logistics collisions. I also want to talk about what is the role of product lifecycle management and, especially, product data in the overall game plan of how global PLM platforms help de-risking supply chains.
Long-standing challenges in global supply pushed to the highest priorities last year. The pressure from COVID, weather, labor issues, and port delays mounted. All these issues created a huge demand for solutions that can provide a solution for efficiency, agility, and sustainability of supply chain management and supply chain networks. There is also a demand for product lifecycle management solutions capable to connect product data and supply chain solutions with the new level of visibility on the data. Altogether, manufacturing companies are looking for a proactive business model to solve the supply chain issue.
Supply Chain Opportunity For PLM?
The opportunity behind supply chain problems is massive. Manufacturing companies and retailers are losing money and missing opportunities. According to Deliverr, the retail industry lost an estimated $1.14T to out stock items in 2020. Fast delivery is everything these days, therefore delivery in 2 days (compared to 7-10) can boost sales by 40%. Making it move from 2 to 1 day, can deliver growth of 70%.
For manufacturing companies, the supply chain is a super complex process, which is completely not transparent in many ways. One of them is a complex dependency between manufacturers, supply chain tiers, and specific companies producing material and components.
The Famous Fukushima-Daiichi nuclear power station accident led to shortages of some cars. The story is very ugly. Major automakers, including Chrysler Group LLC FIA.MI, Toyota Motor Co 7203.T, General Motors Co GM.N and Ford Motor Co F.N use the pigment, called Xirallic, produced at only one factory in the world — the Onahama plant near the Fukushima-Daiichi nuclear power station in Japan. The plant is operated by German chemical company Merck KGaA MRCG.DE, and has been evacuated. Merck spokesman Gangolf Schrimpf said the company does not know when it will be permitted to reopen the plant, which was closed soon after the March 11 earthquake.
These days, such situations are happening all the time starting from chip shortages to many other components delivery disruptions. Companies are closing their facilities workers, moving, changing priorities, and experiencing huge challenges to balance their supply chain.
The unique opportunity for PLM and other providers of engineering systems is to become a source of intelligence by providing information about dependencies between contractors, suppliers based on the product data (structures, procurement information, and other data science).
Digital Twin, Product Data and Global BOM Graph
One of the biggest challenges in managing the supply chain is the fragmentation of data, which makes supply chain software really difficult. A siloed data makes manufacturing companies disconnected and not able to access the right data at the right time in the first place. A global platform can provide a single source of information for suppliers and stakeholders across the globe. By tracking inventory levels, ordering patterns, and supplier performance metrics, businesses can better anticipate potential problems and take corrective action before they have a negative impact on production.
I’m sure you’ve heard about Digital Twin – an innovative way to create a digital representation of the live objects including many parameters allowing to simulate and model the digital activities virtually. What makes it very special and interesting is that PLM systems hold a lot of related information to how products are built and who needs to be involved in engineering and supply chain management to push the product through the broken supply chain relationships.
Supply Chain Market Drivers
PLM vendors are not alone in the world of supply chain challenges. Companies across the globe are looking at how to bring solutions to supply chain rationalization and optimization. Here are the top market drivers behind the supply chain changes.
Digital transformation is a key driver that leads industrial companies to change their business processes and relationships. It covers communication, better matching of suppliers and transportation, visibility of processes and shipments. All together are targeting an entire supply chain optimization, connecting OEMs with suppliers, and improving data access and value tracking.
Visibility is another big market driver. No one likes to be blind these days. The demand for visibility is breaking silos and helps businesses to identify and respond to inefficiency and potential disruption. The data change to identify these inefficiency starts from the initial product design decisions and goes down to purchasing and supply chain tracking.
Automation and removal of manual tasks is another market driver. Manual operations introduce mistakes and potential delays. Automation is proliferating in all activities across the value chain. It starts from robotic fulfillment, autonomic deliveries, and many other operations that are connected to the virtual product development and manufacturing processes.
PLM Tech and Supply Chain Twins
Digital twins are a very promising approach. Creating a digital representation that can lead manufacturers to simulate and optimize is an opportunity for PLM technology to provide ways to crawl, manage and connect product data into re-usable assets that can become a foundation of sophisticated supply chain management twins.
You can see some interesting examples of how large companies are business supply chain twins relying on publically available data. Big companies such as Amazon, Google, and Microsoft are trying to get ahead in this game using their cloud platforms. Here are a few examples of anouncements:
Google announced its Supply Chain Twin cloud offering in September 2021. Customers like Renault are reportedly seeing reductions of up to 95% in the time it takes to analyze data using the platform.
Microsoft launched a preview of its supply chain digital twin offering in November 2021. Daimler Truck AG is using the solution to reduce downtime and parts shortages as well as accelerate decision-making as, or even before, supply chain issues arise.
Amazon Web Services (AWS) began rolling out its IoT TwinMaker in November 2021. The solution specifically helps enterprises create digital twins of industrial operations, but Amazon could soon look to expand its scope to the entire supply chain.
You can ask where it connects to PLM tech. The answer is simple – data. Let’s take Google Supply Chain Twin which is fully originated from external data. At the same time, getting information about product structure, components, and vendors needed to build a product can provide a unique perspective on how these data sources will star participate in the process of de-risking of the supply chain for all these companies.
Solving supply chain problems is a big opportunity and I can see how multiple vendors these days can be working together to create and manage Supply Chain Twins to produce an intelligent solution to reduce risks and stress from supply chain relationships. PLM technology coming from design and product data provides an unique source of information allowing to de-risk supply chain management and improve the predictability of relationships between supply chain tiers, optimize the process of selection for partners and suppliers as well as to find a way to digitally transform an entire supply chain. Just my thoughts…
Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network-based platform that manages product data and connects manufacturers, construction companies, and their supply chain networks. My opinion can be unintentionally biased.