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In the ever-changing world of electronics manufacturing , design through procurement activities present unique challenges. The need to source massive amounts of components while managing costs and ensuring supply continuity has never been more critical. And in today’s interconnected global supply chain, achieving total visibility is, in a word, paramount. This eBook is your go-to source for understanding, implementing, and applying total supply chain visibility.
Whether you’re an executive driving strategic initiatives, a sourcing leader managing supplier relationships, an engineer making design decisions, or a supply chain pro looking to optimize operations, this eBook provides the knowledge and strategies you need to achieve total supply chain visiblity—tier II+ across all parts—and transform your supply chain into a competitive advantage.
At the heart of supply chain visibility lies the concept of uninterrupted supply continuity. More than ever, manufacturers depend on suppliers, sub-suppliers, and partners to deliver the raw materials, components and assemblies needed to create their finished products, making a complete, 360º view of the entire supply chain crucial to an organization’s success. Without visiblity into all tiers and component data, delays, disruptions, cost spikes, and operational headaches are inevitable, often resulting in costly production stoppages and missed customer deadlines.
With total Tier II+ visibility, organizations can proactively identify and mitigate risks, analyze and act on costs-saving opportunities, and engage in on-demand collaboration between the right internal and external stakeholders, ensuring a smooth flow of materials, and minimizing the impact of unforeseen events.
This chapter takes a deeper look into the reasons total supply chain visibility is needed in the modern electronics supply chain.
Organizations are under constant pressure to optimize their operations and reduce expenses. Total visibility into the supply chain can deliver insights into the cost drivers at every stage, from design to procurement. This visibility enables them to identify areas of inefficiency, eliminate waste, and negotiate favorable pricing with suppliers. Ultimately, supply chain teams are able to make informed, reliable decisions about sourcing strategies and achieve cost savings while maintaining the desired quality and performance of their products.
Economic uncertainty and disruptions caused by man-made and natural disasters pose significant challenges for manufacturers worldwide. With such volatile environments, supply chain visibility acts as the GoogleMaps of your supply chain, helping you navigate through uncertainties and getting you to your desired outcome. With total supply chain visibility, enterprises can quickly assess the impact of disruptions and identify alternative sources of supply. They can also better develop contingency plans and implement agile strategies to mitigate the adverse effects of crisis events. In times of crisis, organizations with robust supply chain visibility are better equipped to adapt, recover, and maintain business continuity
Demand planning is a critical aspect of supply chain management, and holistic, tier 2 and below part visibility is critical to an accurate (read: successful) plan. Without total visibility, organizations may face challenges in correctly forecasting demand and aligning it with procurement, sourcing, and production activities.
As previously mentioned, today’s interconnected global landscape creates widespread dependencies on lower-tier suppliers. So, relying solely on top-level visibility can lead to inaccuracies and inefficiencies. To have a clear understanding of the entire supply chain ecosystem, including potential bottlenecks, risks, and opportunities, organizations need total visibility. It allows for improved collaboration with suppliers, ensuring that accurate demand signals flow seamlessly across the supply chain, leading to better demand planning outcomes, and even better, enhancing customer satisfaction and operational efficiency.
To achieve total supply chain visibility, organizations need to embrace digital transformation, particularly in direct materials sourcing. The traditional reliance on manual and fragmented processes lacks the speed, accuracy, and real-time insights required for effective supply chain management. Using digital technologies like cloud computing, AI-backed software, and advanced analytics, organizations can capture, integrate, and analyze data from infinite sources acrossthe supply chain.
Only through digital transformation can organizations achieve real-time monitoring, predictive analytics, and enhanced collaboration, or rather, only with modern tech and tools can manufacturers gain the ability to make data-driven decisions and see how Tier II and below suppliers and components are performing.
Access to comprehensive and accurate component availability, lead times, and potential risks lets engineering teams make smarter design decisions. When engineering can see and measure the right parts that align with both design and supply chain requirements, the manufacturing process becomes its most effective. Additionally, engineering can collaborate with suppliers, gaining insights into emerging technologies, alternative materials, and innovative solutions. All of this means highly optimized designs, exceptional product quality, and faster, smarter product development.
Full-scope Tier II+ supplier analysis means stronger supplier performance, reliability, and financials analysis. What’s more,, that real-time supplier data gets used to evaluate supplier capabilities, track supplier compliance, and manage risks effectively. This means more informed and cost-effective supplier selection, contract negotiations, and sourcing & procurement processes. Ultimately, by aligning sourcing strategies with supply chain visibility, commodity sourcing teams can drive cost savings, mitigate supply disruptions, and build robust supplier partnerships.
Supply chain executives are the architects of the supply network, orchestrating the end-to-end supply chain. Only 360º supply chain visibility provides the data needed to identify bottlenecks, inefficiencies, and potential risks across every link. Proactive risk management and mitigation strategies, enhanced, precise demand forecasting, perfected inventory levels, and improved supply-demand balancing are just some of the benefits supply chain leaders can realize with total supply chain visibility. Even better, enhanced collaboration with key stakeholders allows for continuous improvement initiatives and a more exact alignment of strategic objectives and operational execution.
Total supply chain visibility brings tangible benefits to engineering teams, commodity sourcing teams, and supply chain executives alike. By leveraging comprehensive visibility into Tier II+ suppliers, all stakeholders can make data-driven decisions, optimize processes, and seamlessly collaborate. The result is improved product designs, cost savings, resilient supply chains, and ultimately, a competitive advantage in the marketplace.
Tier II+ visibility has a profound collaboration effect extending beyond just directly involved internal teams. It enables quicker coordination between various supply chain links, including suppliers, partners, and contract manufacturers. The benefits enterprises can realize from this collaboration effect are invaluable:
By fostering collaboration, breaking down silos, and leveraging the power of digital transformation, organizations can unlock the full potential of their supply chain. The synergy achieved through cross-functional collaboration enhances decision-making, promotes efficiency, and strengthens relationships with suppliers and partners. Ultimately, it is the collective effort of all teams and departments that drives success and enables organizations to navigate challenges, seize opportunities, and achieve sustainable growth.
The manufacturing supply chain is susceptible to various uncertainties, ranging from economic fluctuations to man-made and natural disasters. This section highlights examples of “uncertain times” that have significantly impacted the manufacturing supply chain. By examining these examples, we can understand the importance of supply chain visibility and how digital transformation of direct materials sourcing could have mitigated the effects of those events.
The COVID-19 pandemic served as a wake-up call for every manufacturer around the world, exposing and exacerbating vulnerabilities in global supply chains. As countries implemented lockdowns and travel restrictions, supply chains experienced disruptions, production halts, and shortages of critical components.
Digital transformation and tier II+ supply chain visibility for direct materials sourcing could have helped manufacturers quickly identify alternative sources, reroute shipments, and proactively manage inventory levels. Also, real-time data and analytics would have enabled them to anticipate demand shifts, optimize production planning, and ensure timely delivery of essential goods.
Trade wars and tariffs have become prevalent in recent years, creating uncertainty and volatility in the global marketplace. Sudden imposition of tariffs can significantly impact supply chains, leading to increased costs and supply disruptions.
Total supply chain visibility allows enterprises to assess potential impacts of trade policies on their suppliers and enables thoroughanalysis of alternative sourcing options. Also, real-time data helps orgs evaluate cost implications, reevaluate supplier relationships, and adapt smarter sourcing strategies.
Natural and man-made disasters like earthquakes, fires, hurricanes, and floods can wreak havoc on supply chains, particularly when key suppliers or production facilities are located in affected regions. These events almost always result in infrastructure damage, facility downtime, and inventory shortages to boot.
With total supply chain visibility, manufacturers can proactively identify vulnerable areas in their supply chains and develop contingency plans, as required. Real-time monitoring of suppliers and inventory also enables swift responses and rerouting of resources to mitigate the impact of natural disasters.
Fluctuations in commodity prices and scarcity of raw materials can create challenges for manufacturers. Sudden shortages disrupt production schedules, increase costs, and cause painful, inefficient sourcing operations that oftem lead to employee burnout.
Digitally transforming sourcing operations and enabling total supply chain visibility lets manufacturers closely monitor commodity markets and proactively identify potential shortages. They can also leverage real-time data to assess supplier capabilities, identify alternative sources, and negotiate contracts to secure necessary raw materials at favorable prices.
In the current aftermath of the global business-impacting events of 2020-2022’s, traditional approaches to supply chain visibility, simply put, don’t cut it. The increasing complexity and interconnectedness of global supply chains coupled with the demonstrable need for real-time insights and agile decision-making demand modern ideas to modern problems. Namely, digital transformation in sourcing and supply chain processes. This section explores the limitations and inefficiencies of traditional approaches to supply chain visibility and highlights the reasons why they are no longer sufficient in today’s dynamic business landscape.
The changes presented by today’s “new normal” demand a shift towards digital transformation in sourcing and supply chain processes. By embracing digital transformation, organizations can overcome the limitations of the past and proactively manage disruptions, optimize operations, and make smarter, faster decisions. In the era of digital transformation, organizations that leverage advanced technologies and collaborative platforms will gain a competitive advantage by ensuring supply chain resilience and agility in the face of uncertainty.
Currently, supply chain visibility focuses on the immediate suppliers or Tier 1 level, neglecting the lower tiers such as Tier 2 and below. This creates blind spots and prevents organizations from having a comprehensive understanding of their supply chains. Today, where disruptions affect every tier, it’s end-to-end visibility—capturing and integrating data from multiple tiers, monitoring and assessing risks across the entire supply chain—is vital to any manufacturer’s success. Without it, organizations will be stuck retroactively managing disruptions, and dealing with stoppages, delays, and cost hikes, not to mention, business headches that come from underinformed business decisions.
The reliance on manual data collection, managing spreadsheets, and disparate data sources makes for time-consuming, error-prone activities, and lack the speed and accuracy required in today’s 24-7, go-go business environment. What’s worse, they actually hinder real-time visibility and prevent manufacturers from quickly identifying and responding to supply chain disruptions. Digital transformation enables the automation of data collection, the integration of systems, and the utilization of advanced analytics to streamlines processes, enhance data accuracy, and truly use real-time analysis of direct materials data, enabling supply chain teams to proactively address any and every condition with timely decisions.
While historical data is valuable for understanding past performance, it doesn’t help organizations anticipate, or more importantly, mitigate future risks. Today, organizations need both predictive and prescriptive insights to: identify potential disruptions, assess the impact of different scenarios, and take preventive actions. Digital transformation empowers organizations with predictive analytics capabilities, enabling them to leverage real-time data, machine learning tech, and simulation models. Those enhanced insights enable enterprises to make data-driven decisions and implement proactive risk mitigation strategies.
Traditionally, collaboration among stakeholders has been needlessly limited. Siloed data and disjointed, infequent communication hinders operations, and can lead to delays in production and effective decision-making. Today more than ever, agility and responsiveness are crucial to success, and organizations need to foster collaboration across the supply chain ecosystem. Total visibility enabled by digital transformation facilitates clear, consistent collaboration by providing a centralized platform for: data sharing, instant communications, and proactive problem-solving. This, inturn, enables faster response times, better coordination, and more efficient resolution of supply chain challenges.
To achieve total supply chain visibility, organizations need to address the end-to-end production process, from design to source to procure. By connecting, monitoring, and analyzing both internal and external data, fostering collaboration, and using key information from contract manufacturers (CMs), organizations can unlock the power of comprehensive supply chain visibility. Let’s explore these concepts in more detail, and how commodity and category sourcing teams, engineering teams, and executive leadership can best plan for an execute a total supply chain visibility strategy.
First, it’s essential to address the entire production. This means integrating data and processes across various stages of the supply chain journey. By breaking down silos and creating a holistic supply view, manufacturers can gain insights into how design decisions impact sourcing and procurement, and vice-versa. This end-to-end approach enables proactive decision-making, risk mitigation, and optimization of the entire supply chain.
To unlock comprehensive supply chain visibility, organizations should leverage both internal and external data sources. Internal sources include information from enterprise systems, such as ERP and PLM, while external data encompasses market trends, supplier performance, and geopolitical factors. The process of “mashing up” internal and external data provides a comprehensive and real-time view of the supply chain, empowering organizations to proactively respond to disruptions and optimize operations.
Early and often collaboration between engineering, sourcing, and supply chain teams is crucial for organizations to ensure design decisions align with sourcing and supply chain considerations. This collaboration promotes the concept of “Design for Supply,” where engineering designs products with supply chain optimization in mind. By involving sourcing and supply chain expertise from the get-go, organizations can reduce supply chain risks, improve component availability, and enhance product quality.
Total supply chain visibility means total access to all of your materials data. So, organizations need to collect critical data from contract manufacturers (CMs). Two key data sources are the Costed Bill of Materials (CBOM) and component inventory data. Among other things, CBOM data provides detailed info on pricing of components used in a product, as well as part numbers, specifications, and all approved manufacturers. Component inventory data from CMs offers visibility into component availability, lead times, and potential shortages. By establishing regular data exchanges and cadence with CMs, organizations can access up-to-date information, identify potential supply constraints, and make informed decisions to mitigate risks.
To effectively plan for and execute a total supply chain visibility strategy, all departments must embrace a digital transformation, one with a sourcing platform that enriches component data with market trends, supplier capabilities, and supply chain risks in real-time, while enabling cross-company collaboration and information sharing.
Here’s a closer look at what each team can do to help realize the transformative vision of total supply chain visibility.
So far, we’ve touched on a range of positive outcomes to which total supply chain visibility leads—a complete view of component usage, real-time risk analysis and managment, stronger relationships with key suppliers, and the ability to leverage best prices with contract manufacturers (CMs). These all work to drive supply chain resilience, optimize costs, and enhance operational efficiency.
Let’s go deeper into the key benefits organizations can realize when they have total visibility, and the resulting best business practices, in place.
By embracing supply chain visibility and digital transformation, organizations get a comprehensive view of component usage throughout the supply chain. This visibility allows them to track the flow of components from design to procurement, enabling better demand forecasting, optimizing inventory levels, and identifying opportunities to enhance their supply chain operations. With a clear understanding of component usage, organizations can make data-driven decisions to minimize excess inventory, reduce costs, and improve overall supply chain efficiency.
Until recently, effective risk managmenet has been exceptionally tasking. Only by monitoring and understanding the impact of lifecycle changes, lead time variations, and inventory fluctuations can manufacturers quickly and cost-effectively take necessary actions to mitigate risks. Whether it’s finding alternative suppliers, adjusting procurement strategies, or implementing contingency plans, total visibility is the keystone to maintaining supply continuity and minimizing the impact of disruptions.
Breaking down data silos is key to breaking down department silos. By connecting data, enterprises can establish strong, collaborative partnerships, and gain deeper insights into supplier capabilities, component availability, and emerging technologies. These relationships foster mutual trust, facilitate information sharing, and drive innovation. Moreover, close collaboration with suppliers helps address supply and cost issues, as organizations can work together to optimize pricing, address component shortages, and explore new sourcing opportunities.
Total supply chain visibility opens up opportunities for organizations to get the right (read: best) prices from contract manufacturers (CMs) through a structured negotiation process. Data-driven insights can be used in quarterly negotiations to optimize pricing and secure competitive rates. Even better, manufacturers can maintain an approved vendor list (AVL) that guarantees CMs source components from trusted suppliers. This approach not only reduces the chances of counterfeit or substandard parts but also contributes to overall supply chain cost optimization and operational efficiency.
When organizations achieve comprehensive supply chain visibility and embrace digital transformation, the outcomes can be game-changing. Imagine having a clear and complete view of component usage, effectively managing risks, establishing robust relationships with key suppliers, and the data to capitalize on the best prices from CMs. These achievements lead to supply chain resilience, cost optimization, and operational efficiency—things that every business in the supply chain is striving for. These and other benefits ripple across the entire supply chain, with improved supplier performance, minimized disruptions, and ultimately, a competitive advantage in the market. By taking a holistic approach to supply chain visibility, organizations can skillfully navigate the challenges of the modern business landscape and position themselves for success. It’s about staying ahead of the curve and making smart, informed decisions that propel organizations forward.
Congratulations! You have journeyed through the key concepts of achieving total supply chain visibility in today’s dynamic business landscape. We have explored the importance of supply chain visibility, the challenges faced during uncertain times, the limitations of traditional approaches, and the steps to achieve comprehensive visibility through digital transformation. Now, let’s wrap it all up and discover how Part Analytics, the leading supply management and sourcing platform, can be the key to unlocking your organization’s digital transformation and total supply chain visibility.