Global Logistics and Supply Chain Strategies - May 2008 - (Page 41)

need for assured supply with the risk of obsolescence. The tool also determines how much a given supplier can contribute. Meanwhile, on the factory floor, manufacturers must coordinate the inbound flow of parts with the ability of their machines to make certain types of product. One customer of Bristlecone, a printing plant, has to carefully plan production to allow for the time needed to clean equipment when it switches from one color to another, says Anil Gupta, vice president of marketing. Companies attempting to build more complicated supplier bases are finding help from vendors of spend management software. Pat Furey, senior category manager for Sunnyvale, Calif.-based Ariba Inc., says his company can advise on the best place to site production and suppliers, based on considerations of logistics, cost and the competitive landscape. Category managers can track product price and availability in various locations. Ariba also takes into account the risks from sourcing in distant countries, or places where supply disruptions might be more likely. “We make sure our customers are sourcing in the right region,” Furey says. The tendency of manufacturers to outsource whole assemblies presents new challenges for certain sectors, Furey says. In adopting a process that is common in the computer industry, Boeing was treading on new ground. Some key suppliers weren’t accustomed to assembly work and had to adjust their operations. The Boeing experiment, he says, “wasn’t a bad idea. It’s just going to take a while [to perfect].” Multiple Supply Chains A multi-sourced supply chain actually consists of several chains that must be modeled and managed in a coherent manner, says Bob Anson, senior director for total supply management with i2 Technologies in Dallas. Step one is to perform high-level modeling of the entire network. “As companies have become more global,” he says, “they have not necessarily had a centralized approach to supply chain network definition.” Planning has tended to occur on a region-by-region basis. Master planning has to take place across all supply chains in order to allow for efficient material flow to and from multiple regions. Only then can companies designate materials for the right region while making trade-offs that result in the best out- come from a global perspective. On the execution end, Web-based supplier portals can help to foster collaboration among an army of suppliers in various locations, not to mention better control by an OEM over its whole supplier base, Anson says. The increase in supply lines and partners doesn’t mean that companies can relinquish control over their networks. According to Anson, some OEMs are negotiating price or capacity with Tier 2 suppliers, then acting as a broker of those parts for Tier 1 producers. In the high-tech sector, a company might purchase key semiconduc- goal without a consolidated view of global customer demand. Only then can they plan their supply chains appropriately. Each decision carries its own set of impacts related to cost, timing, service and product quality. Global network optimization tools can help companies make the proper trade-offs between capacity and inventory, based on good demand planning, Kinder says. Leaders in the field reoptimize their systems at least monthly. In the pharmaceutical industry, companies selling into Europe might adjust their sourcing patterns several times a year, based on “As companies have become more global, they have not necessarily had a centralized approach to a supply chain network definition.” — Bob Anson of i2 Technologies tor components for use in sub-assemblies. The trend can be seen in electronics as well, where companies such as Hewlett-Packard and Dell are buying up raw materials and allocating them to suppliers as needed. In the process, they get a better price or ensure access to key commodities. In such cases, it becomes essential for the manufacturer to keep close tabs on purchased raw materials as they move toward final assembly. That’s the only way to ensure that suppliers are meeting their contractual obligations and not using the OEM’s dedicated commodities or parts for another customer. “Visibility mechanisms allow you to make sure that you can connect the dots,” says Exostar’s Scott. Andrew Kinder, director of supply chain product marketing with Infor in Atlanta, sees no reversal of the trend toward outsourced supply chains. On the contrary, he learned in a recent survey of 100 supply chain directors in the United Kingdom, companies are still planning to outsource their operations and China remains the number-one target. “Elongated” supply chains require the management of multiple items from multiple sources, Kinder says, even if China is the focus for most finished-goods production. But companies won’t accomplish that the need to match supply with demand. Kinder tells of one Infor client, a nautical engineering company, that relies on sole sourcing only when absolutely necessary, drawing on multiple suppliers for other types of product. The company is fully aware of the risks involved in each sourcing decision. As complicated and risky as it might seem, the multi-source model offers advantages of cost and efficiency that will continue to entice companies with global supply chains. Santhanam suggests that many manufacturers are just beginning to understand the strategy’s value. “There’s a long way to go,” he says. “But it’s clear that the synchronization and inventory reduction mantra is on everyone’s lips.” To access this article online, visit The Digital Edition at www.SupplyChainBrain.com. Resource Links AMR Research, www.amrresearch.com APL Logistics, www.apllogistics.com Ariba, www.ariba.com Bristlecone, www.bcone.com Exostar, www.exostar.com i2 Technologies, www.i2.com Infor, www.infor.com Schenker, www.schenker.com TradeBeam, www.tradebeam.com www.SupplyChainBrain.com GLOBAL LOGISTICS & SUPPLY CHAIN STRATEGIES 41 http://www.SupplyChainBrain.com http://www.amrresearch.com http://www.apllogistics.com http://www.ariba.com http://www.bcone.com http://www.exostar.com http://www.i2.com http://www.infor.com http://www.schenker.com http://www.tradebeam.com http://www.SupplyChainBrain.com

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Global Logistics and Supply Chain Strategies - May 2008

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