Supply Chain Resilience Built by Early Planning
Continuing our conversation on the Industry Forward Podcast, hosts Dale Tutt and Conor Peick talk with Richard Barnett, the Chief Marketing Officer and SaaS Sales Leader at Supplyframe. In part one we talked about the uncertainty driving global supply chains, the power of shifting development left with digital transformation, how businesses are breaking down silos and how to understand all of these transitions under the broader lens of risk. In part two, we dive into early supply chain planning, how to deal with legacy tools for management and a glimpse into the future of supply chains. You can listen to the podcast here, or through the player below, or continue reading for a summary of the discussion!
Supply Chain Digitalization Supports Early Planning
Dale, Richard and I kickoff the episode by reckoning with the impact of growing product and system complexity on supply chain management strategies. Its clear that early planning for product manufacturability, maintainability and the construction of global supply chains has become critical; the earlier the better. Richard noted that early design decisions have an outsized impact on product cost and performance. Its been found that these early decisions can account for as much as 80% of the overall project cost. This is not due to exorbitant costs associated with such early design and planning work. Rather, the immense impact of early decisions arises because the decisions being made will lock in resources and investments made throughout product development, production, service and end-of-life.
We also talked about how traditional tools and methods, though still useful in many contexts, cannot scale to meet the new challenges facing supply chain management teams, leaving them to make these critical early decisions with incomplete or imperfect information. Sourcing new supplier information, quotes and product specifications is time consuming and costly in its own right. Under pressure to reduce costs and accelerate timelines, teams are likely to rely on familiar options, potentially leaving cost or performance gains on the table.
Moving forward, companies must move past spreadsheet based supply chain management systems. These systems will remain important pieces of any tool set for supply chain management, particularly due to their flexibility for quick analyses, but they struggle to represent the complete business value of supply decisions.
The Importance of Integrating Legacy Tools and Processes
Next, Dale and Richard dove into how companies should approach digitalization, building a Digital Twin and the integration of these new methods with legacy tools. Data that has traditionally been held in spreadsheets should be connected as part of the comprehensive digital twin. Such integration helps define and provide context to numerical values in spreadsheets and even more nebulous factors that affect supply decisions. Critically, the goal of digitalization is not to throw away legacy solutions completely, but to integrate them into a larger digital framework that aids rapid and informed decision-making.
Supply chain digitalization through the comprehensive Digital Twin supports, for instance, high fidelity simulation of supply chain options early in the product or system development process. Such simulation enables companies to make tradeoff decisions accounting for a multitude of factors, leading to significant benefits in margins down the road. These simulations can also aid flexibility during the lifetime of the product or system – substituting different supplier sources or preemptively stocking more material to ride-out an expected scarcity.
The future of supply chain management
Across industries there is an ongoing shift towards resiliency in supply chain management. Supply chain instability in recent years has driven many businesses to reevaluate the most effective solutions. As global supply chains grow in complexity, even small perturbations can impact the efficiency and effectiveness of these interwoven systems. The integration of supply chain management into a digitalized product development methodology will empower companies to improve resiliency and agility in the face of unforeseen events.
But for even more information on how digitalization is changing the realm of supply chain management, make sure to listen to the full episode with Dale Tutt, Richard Barnett and Conor Peick. You can also tune into the first part of their discussion here.
Siemens Digital Industries Software helps organizations of all sizes digitally transform using software, hardware and services from the Siemens Xcelerator business platform. Siemens’ software and the comprehensive digital twin enable companies to optimize their design, engineering and manufacturing processes to turn today’s ideas into the sustainable products of the future. From chips to entire systems, from product to process, across all industries. Siemens Digital Industries Software – Accelerating transformation.
