When Motorola Mobility Holdings was cut loose from Motorola Inc. in 2011, it found itself in a highly competitive marketplace – without the state-of-the-art tools and processes needed to meet changing customer requirements.
Specifically, Motorola Mobility lacked the tight connections with trading partners that were essential to an efficient, fully functioning supply chain. Rechristened Motorola Solutions, it had to find a way to improve on-time deliveries, inventory turns, forecasting, and parts availability – all through closer ties with critical suppliers. The answer lay in the concept of collaborative execution.
Motorola Solutions has positioned itself as a provider of communications technology to business and government. Customers include the retail, hospitality, transportation and logistics, energy and utility, education and healthcare industries, as well as regulatory agencies enforcing public safety. The company’s product line consists of a wide range of radios and mobile computing devices.
That’s a highly demanding sector, with little tolerance for error or slips in customer service. Complicating matters is the breadth of Motorola Solutions’ account base, from small businesses to Fortune 500 companies.
Motorola Solutions had been saddled with an array of legacy systems, including an old enterprise resource planning (ERP) application, as well as the former parent’s roster of channel partners. Much of that had to change, if the company was to meet the demands of modern-day customers.
The push to become “customer-driven” entailed a number of clear but ambitious goals:
• Achieve visibility of real-time information across multiple tiers of the supply network;
• Commit to orders on a timely basis, executing within the customer’s window of expectations;
• Develop a central data repository for decision-making;
• Implement closed-loop processes for the purchase-order lifecycle;
• Be able to identify supply constraints proactively, and
• Fashion a just-in-time (JIT) inventory management program that could keep pace with sales growth.
Choosing a Partner
For its technology partner, Motorola Solutions looked to E2open to help construct a system that would meet those goals. In particular, the company sought to draw on the vendor’s cloud-based platform for trading-partner collaboration. Driving the effort was a handful of key metrics: on-time delivery, adherence to first scheduled ship date, and inventory turns.
The E2open platform took into account the varied nature of Motorola Solutions’ 25,000-plus indirect channel partners. The company needed to be able to exchange data in any payload format and protocol, regardless of a given partner’s level of technological sophistication. New users were offered self-configuring connectivity options in the cloud, allowing them to bypass the cost of testing and infrastructure maintenance.
To date, Motorola Solutions has on-boarded more than 1,200 suppliers to the collaboration platform, representing the majority of its spend. More than 5,000 users are actively exchanging information.
The next step of the initiative involved an even deeper level of collaboration. Motorola Solutions needed to work with suppliers to execute a number of key business processes, including forecast commit, JIT, parts-shortage control and quality management. To make that happen, all partners in the trading network had to achieve a “single version of the truth,” fueled by real-time access to critical data. In addition, Motorola Solutions wanted to manage by exception, dealing only with those issues that fell outside of defined performance parameters.
The company defines collaborative execution as “the ability of all partners in a global trading network to work together to resolve real and potential problems with the best available information – quickly, iteratively and cost-effectively.” To put it more succinctly, it was determined to respond to customer requirements as quickly as possible.
The old method of committing to a demand forecast drew on a 25-year-old “Schedule Share” legacy system that the company inherited from Motorola Inc. It its place, Motorola Solutions and E2open substituted an automated process built on the latter’s cloud-based platform. Suppliers were given visibility to business exceptions, and both sides gained the ability to resolve issues proactively.
In the process, Motorola Solutions was able to work with an expanded group of suppliers on both blanket and discreet purchase orders. The company now publishes forecasts in daily, weekly and monthly buckets, and receives the appropriate commits from suppliers. Any disconnects between supply and demand, or mismatches between forecast and commit, are highlighted through pre-defined alerts.
Good JIT management is essential to the success of Motorola Solutions’ business. Together with E2open, it developed an automated inventory-management process, allowing for collaboration on a just-in-time basis. The setup provides immediate notification of any deviations from plan or forecast, as well as projected inventory violations. The partners can then move quickly to resolve any emerging issues.
Parts shortages can seriously disrupt a high-tech supply chain. In Motorola Solutions’ world, there’s simply no room for error. So the company devised a program for resolving shortages in three different ways, allowing it to expedite, transfer or re-route items, according to the most cost-effective manner that meets the customer’s needs. Drawing on a “zero-latency” snapshot of inventory levels, the company has reduced shortages by 20 percent, lowered expediting costs and shrunk the average time to resolution – in some instances from weeks to hours.
Government agencies can be justifiably picky about quality. Motorola Solutions must cope with customers’ stringent standards as well as long product lifecycles. Key to its success is the proper management of part-change notifications (PCNs) and material corrective action requests (MCARs). Again, the E2open collaboration platform allows the company to simplify and optimize those processes. Suppliers can view and track PCNs and MCARs across the network, and work closely with the manufacturer to address engineering changes and issues of material quality.
Results to date have been impressive. In addition to the 20-percent reduction in critical parts shortages, Motorola Solutions has improved on-time deliveries by an average of 5 percent. It has also cut inventory and carrying costs, eliminated the cost of ownership for four legacy collaboration systems through reliance on the cloud, enabled a complete audit trail of purchase-order collaboration with all partners, and realized a system of automated, end-to-end exception management.
Most of all, Motorola Solutions has seen a marked improvement in customer satisfaction, driven by better visibility and higher reliability of supplier commits. Drawing on the E2open platform, the cloud-based system has delivered “a clear return on investment,” the company says.
Keywords: supply chain, supply chain management, high tech supply chain, Motorola Solutions supply chain, cloud supply chain, SaaS, supply chain planning, supply chain systems, inventory management, inventory control sourcing solutions