Executive Briefings

Maintain Quality in a Complex Supply Chain With Better Information Management

The growing complexity of products, along with the continued globalization of business, has made the supply chain more sophisticated and difficult to manage than ever before. Add to this the threat of unexpected natural disasters - such as the earthquake, tsunami and nuclear crisis in Japan last year - and suddenly manufacturers face challenges that are so complicated they warrant re-thinking the fundamental principles of supply chain management that have guided businesses for years.

Increasing complexity, information overload and rising quality levels are driving fundamental changes across a number of industries. This has created a greater need for manufacturing intelligence coupled with a need for better systems to manage the "flow" of information.  These changes have also significantly impacted the supply chain, where greater visibility and responsiveness is now needed to just maintain "status quo," in order to respond within a reasonable time frame to today's dynamic market and customer requirements.

Managing the flow of operations data from manufacturing operations and suppliers, while keeping an eye on quality and customer demand, is a delicate balancing act, especially as businesses increasingly rely on global, multi-tier suppliers for critical components.   As a result, manufacturers need to proactively meet complex supply chain issues head-on by making better use of data to enable greater manufacturing intelligence through the use of expanded flows of information, driving higher quality and responsiveness standards.

Streamlining the Flow of Information

Today's factories increasingly rely on data from multiple sources along the supply chain to produce their output. But the growing complexity of products and diversity of suppliers are now generating record volumes of information for manufacturers to deal with, ideally on a more real-time basis. In other words, collecting operations data at the end of the week or the month will no longer suffice. Do you need to know information on every factory every minute? Certainly not. But, if you have a performance issue, supply issue or supplier quality challenge, then the faster you can respond and take corrective action, the smaller your problem becomes and the less of an impact on your customers. Balancing this information flood is becoming increasingly difficult to not only sort and analyze, but to simply manage effectively without potentially crippling many manufacturing operations in the future.

It's not going to get any easier. Industry estimates suggest volumes of information are now growing worldwide at a minimum of 59 percent per year. The size of large data warehouses is almost tripling every two years. Little wonder that industry analysts at Gartner recently found the data explosion to be one of the "top three challenges" for the world's CIOs.

Although technology has already streamlined factory operations and relationships along the supply chain a great deal, the ability to intelligently process and use an ever-increasing volume of information, both quickly and efficiently, will be an important differentiator between the companies that succeed and those that fail in a global business environment.

With today's technology, this can mean equipping plant managers with mobile handheld devices, such as iPads and tablets, in order to access real-time information from suppliers so that the production process can be optimally managed.  Today's workers needed to be "un-tethered" from their desktops for greater movement around the shop floor.  It's critical that plant managers have an immediate view of production and supplier so that information can be factored into the process as quickly as possible.

For example, if a plant manager becomes aware of a delay from a supplier, it may be possible to quickly adjust the production process to accommodate for this delay, resulting in no impact in scheduled output.  This might mean modifying production, or performing necessary equipment maintenance in a way that minimizes downtime to keep operations running smoothly.  Global supply chains and high-volume factories function in real time. Plant managers need access to this same data also, in order to ensure efficient operations are maintained.

Winners will know what is going on faster, and are typically also capable of implementing change quicker. Moving faster creates sustained competitive advantage by better meeting the needs of tomorrow's customers - a "must have" advantage to compete in the future.

Increasing Quality Standards Along the Supply Chain

Quality has taken on a whole new level of importance for manufacturers.  However, maintaining a high-quality level in a global, complex supply chain has become increasingly challenging. The brand damage that has resulted over the past few years due to low quality products has been substantial. With steadily increasing quality standards, the IT systems supporting production processes must be capable of continuous improvement. As new processes are created, they must also be managed and measured, causing a ripple effect of challenges.

No longer is it sufficient to simply identify a quality problem. It must now also be possible to take immediate corrective action to contain any potential fallout from a quality issue. With today's tight production schedules and Just-In-Time inventory strategies, a quality problem along the supply chain left unchecked can quickly balloon into a very serious issue - one that significantly impacts brand integrity and the bottom line.

For example, in the automotive industry, the complexity involved in making an automobile is unprecedented.  Vehicles have a vast range of options from Bluetooth capabilities, to automatic parking and voice-based commands.  The software required to activate these new options is staggering, with base models requiring up to one-and-a-half million lines of code per vehicle.  Naturally, this involves coordinating with multiple suppliers for the procurement of highly specific electronic components.

This added complexity has made quality control more difficult. Increasing the number of quality checks along the supply chain may improve product quality. However, it could also slow down production, resulting in increased labor and inventory costs in an environment that calls for greater speed and efficiency.

This scenario illustrates a fundamental challenge for manufacturers and points to the reason why steadily increasing data requirements have become the modern manufacturing challenge. In order to strike the delicate balance between quality, cost and managing product complexity, many manufacturers must now consider new ways to generate efficiency. This includes streamlining operations, performing continuous improvement checks and improving the way they work with suppliers and partners all over the world.

Importantly, each of these activities requires a higher level of visibility into a company's manufacturing operations and, especially, those of its suppliers and partners. The recent economic crisis has also forced many manufactures to closely monitor their suppliers' economic viability. In some case suppliers were forced to shut down completely, leaving manufacturers with giant holes in their product supply chain. Industry leaders have learned how to tightly monitor their supplier's operations, ideally through "close to" real-time viability. These leaders have put contingency plans in place, based on cost, material availability and ability to deliver to corporate standards.

Building an Agile Supply Chain

The following are some of the best practices that manufacturers are implementing today to increase their operational flexibility, enabling faster response to change. These strategic actions provide an ideal role model for the factory of the future, which includes better use of data and analytics to function more quickly and effectively, leading to performance improvement, reduced costs and greater profitability.

Build a Flexible Process Framework: Factories will need to be more flexible in the way they manage supply chain operations in order to adjust quickly to new product demand. Those that embrace a platform-based approach, ideally through a business process management-based architecture for their production processes will be better able to operate over globally distributed environments, providing clear operational benefits. Offsetting visibility challenges will need to be met with more standardized processes and standardized data, resulting in better analytics. Manufacturers need to empower managers with the right systems, tools and information in order to respond quickly to new, developing situations as they occur.

• Create a Supply Chain-Centric Data Warehouse: Instead of pushing all data into the corporate BI data warehouse, essentially into what can become a "data tomb," companies should maintain the data critical to their business in a central location, so it is easily accessible by managers and manufacturing personnel. This will better empower those in manufacturing to have rapid access to the key data they need.

• Collaborate Locally and Globally:  Companies need to recognize that as the pool of data continues to expand, it might not make sense for it to be located within operations processes or equipment on the factory floor. Sophisticated data archiving techniques exist such that data can be made available in "near" real-time without impacting operational performance. With ready access to more data, faster, a higher degree of analytics can be performed on a wider scope of operational processes. To further streamline the collaborative process, selective data can be collected and stored as an embedded component of an actual business process, which can be leveraged to start automating responses to common circumstances in any factory around the globe. For example, a quality check that fails could automatically trigger an increase in the frequency of quality checks instantly, helping to potentially curtail an "out of spec" quality part.

• Integrate Processes into the Business: Greater integration of business processes spanning multiple operations will further contribute to the ability of a manufacturer to respond faster to change while retaining the necessary visibility of manufacturing intelligence. Manufacturers should fully consider evaluating their business processes holistically, such that information can be applied to many decision points along the process. This will help improve performance and efficiency without sacrificing agility. Any remaining paper processes should ultimately be eradicated from the production flow, given the speed and efficiency benefits that more digitally-driven, agile factories can achieve.

Complexity, quality and data overload are driving the need for greater manufacturing intelligence, which in turn is driving fundamental changes across the manufacturing industry.  As supply chain complexity continues to increase, companies will be tasked with even greater data and process visibility demands in the years to come by customers, strategic partners, shareholders and employees alike.

Fortunately, technologies exist to begin to address these challenges. The visionary companies that understand the need for greater visibility into their manufacturing performance now have the opportunity to gain significant market share in the future.

Source: Apriso Corporation

Keywords: Business Intelligence & Analytics, Business Process Management, Collaboration & Integration, Asset Management, Technology; Business Strategy Alignment, Supply Chain Analysis & Consulting, Global Supply Chain Management, operations data management, data warehouse, supply-chain-centric data warehouse, real-time information

Increasing complexity, information overload and rising quality levels are driving fundamental changes across a number of industries. This has created a greater need for manufacturing intelligence coupled with a need for better systems to manage the "flow" of information.  These changes have also significantly impacted the supply chain, where greater visibility and responsiveness is now needed to just maintain "status quo," in order to respond within a reasonable time frame to today's dynamic market and customer requirements.

Managing the flow of operations data from manufacturing operations and suppliers, while keeping an eye on quality and customer demand, is a delicate balancing act, especially as businesses increasingly rely on global, multi-tier suppliers for critical components.   As a result, manufacturers need to proactively meet complex supply chain issues head-on by making better use of data to enable greater manufacturing intelligence through the use of expanded flows of information, driving higher quality and responsiveness standards.

Streamlining the Flow of Information

Today's factories increasingly rely on data from multiple sources along the supply chain to produce their output. But the growing complexity of products and diversity of suppliers are now generating record volumes of information for manufacturers to deal with, ideally on a more real-time basis. In other words, collecting operations data at the end of the week or the month will no longer suffice. Do you need to know information on every factory every minute? Certainly not. But, if you have a performance issue, supply issue or supplier quality challenge, then the faster you can respond and take corrective action, the smaller your problem becomes and the less of an impact on your customers. Balancing this information flood is becoming increasingly difficult to not only sort and analyze, but to simply manage effectively without potentially crippling many manufacturing operations in the future.

It's not going to get any easier. Industry estimates suggest volumes of information are now growing worldwide at a minimum of 59 percent per year. The size of large data warehouses is almost tripling every two years. Little wonder that industry analysts at Gartner recently found the data explosion to be one of the "top three challenges" for the world's CIOs.

Although technology has already streamlined factory operations and relationships along the supply chain a great deal, the ability to intelligently process and use an ever-increasing volume of information, both quickly and efficiently, will be an important differentiator between the companies that succeed and those that fail in a global business environment.

With today's technology, this can mean equipping plant managers with mobile handheld devices, such as iPads and tablets, in order to access real-time information from suppliers so that the production process can be optimally managed.  Today's workers needed to be "un-tethered" from their desktops for greater movement around the shop floor.  It's critical that plant managers have an immediate view of production and supplier so that information can be factored into the process as quickly as possible.

For example, if a plant manager becomes aware of a delay from a supplier, it may be possible to quickly adjust the production process to accommodate for this delay, resulting in no impact in scheduled output.  This might mean modifying production, or performing necessary equipment maintenance in a way that minimizes downtime to keep operations running smoothly.  Global supply chains and high-volume factories function in real time. Plant managers need access to this same data also, in order to ensure efficient operations are maintained.

Winners will know what is going on faster, and are typically also capable of implementing change quicker. Moving faster creates sustained competitive advantage by better meeting the needs of tomorrow's customers - a "must have" advantage to compete in the future.

Increasing Quality Standards Along the Supply Chain

Quality has taken on a whole new level of importance for manufacturers.  However, maintaining a high-quality level in a global, complex supply chain has become increasingly challenging. The brand damage that has resulted over the past few years due to low quality products has been substantial. With steadily increasing quality standards, the IT systems supporting production processes must be capable of continuous improvement. As new processes are created, they must also be managed and measured, causing a ripple effect of challenges.

No longer is it sufficient to simply identify a quality problem. It must now also be possible to take immediate corrective action to contain any potential fallout from a quality issue. With today's tight production schedules and Just-In-Time inventory strategies, a quality problem along the supply chain left unchecked can quickly balloon into a very serious issue - one that significantly impacts brand integrity and the bottom line.

For example, in the automotive industry, the complexity involved in making an automobile is unprecedented.  Vehicles have a vast range of options from Bluetooth capabilities, to automatic parking and voice-based commands.  The software required to activate these new options is staggering, with base models requiring up to one-and-a-half million lines of code per vehicle.  Naturally, this involves coordinating with multiple suppliers for the procurement of highly specific electronic components.

This added complexity has made quality control more difficult. Increasing the number of quality checks along the supply chain may improve product quality. However, it could also slow down production, resulting in increased labor and inventory costs in an environment that calls for greater speed and efficiency.

This scenario illustrates a fundamental challenge for manufacturers and points to the reason why steadily increasing data requirements have become the modern manufacturing challenge. In order to strike the delicate balance between quality, cost and managing product complexity, many manufacturers must now consider new ways to generate efficiency. This includes streamlining operations, performing continuous improvement checks and improving the way they work with suppliers and partners all over the world.

Importantly, each of these activities requires a higher level of visibility into a company's manufacturing operations and, especially, those of its suppliers and partners. The recent economic crisis has also forced many manufactures to closely monitor their suppliers' economic viability. In some case suppliers were forced to shut down completely, leaving manufacturers with giant holes in their product supply chain. Industry leaders have learned how to tightly monitor their supplier's operations, ideally through "close to" real-time viability. These leaders have put contingency plans in place, based on cost, material availability and ability to deliver to corporate standards.

Building an Agile Supply Chain

The following are some of the best practices that manufacturers are implementing today to increase their operational flexibility, enabling faster response to change. These strategic actions provide an ideal role model for the factory of the future, which includes better use of data and analytics to function more quickly and effectively, leading to performance improvement, reduced costs and greater profitability.

Build a Flexible Process Framework: Factories will need to be more flexible in the way they manage supply chain operations in order to adjust quickly to new product demand. Those that embrace a platform-based approach, ideally through a business process management-based architecture for their production processes will be better able to operate over globally distributed environments, providing clear operational benefits. Offsetting visibility challenges will need to be met with more standardized processes and standardized data, resulting in better analytics. Manufacturers need to empower managers with the right systems, tools and information in order to respond quickly to new, developing situations as they occur.

• Create a Supply Chain-Centric Data Warehouse: Instead of pushing all data into the corporate BI data warehouse, essentially into what can become a "data tomb," companies should maintain the data critical to their business in a central location, so it is easily accessible by managers and manufacturing personnel. This will better empower those in manufacturing to have rapid access to the key data they need.

• Collaborate Locally and Globally:  Companies need to recognize that as the pool of data continues to expand, it might not make sense for it to be located within operations processes or equipment on the factory floor. Sophisticated data archiving techniques exist such that data can be made available in "near" real-time without impacting operational performance. With ready access to more data, faster, a higher degree of analytics can be performed on a wider scope of operational processes. To further streamline the collaborative process, selective data can be collected and stored as an embedded component of an actual business process, which can be leveraged to start automating responses to common circumstances in any factory around the globe. For example, a quality check that fails could automatically trigger an increase in the frequency of quality checks instantly, helping to potentially curtail an "out of spec" quality part.

• Integrate Processes into the Business: Greater integration of business processes spanning multiple operations will further contribute to the ability of a manufacturer to respond faster to change while retaining the necessary visibility of manufacturing intelligence. Manufacturers should fully consider evaluating their business processes holistically, such that information can be applied to many decision points along the process. This will help improve performance and efficiency without sacrificing agility. Any remaining paper processes should ultimately be eradicated from the production flow, given the speed and efficiency benefits that more digitally-driven, agile factories can achieve.

Complexity, quality and data overload are driving the need for greater manufacturing intelligence, which in turn is driving fundamental changes across the manufacturing industry.  As supply chain complexity continues to increase, companies will be tasked with even greater data and process visibility demands in the years to come by customers, strategic partners, shareholders and employees alike.

Fortunately, technologies exist to begin to address these challenges. The visionary companies that understand the need for greater visibility into their manufacturing performance now have the opportunity to gain significant market share in the future.

Source: Apriso Corporation

Keywords: Business Intelligence & Analytics, Business Process Management, Collaboration & Integration, Asset Management, Technology; Business Strategy Alignment, Supply Chain Analysis & Consulting, Global Supply Chain Management, operations data management, data warehouse, supply-chain-centric data warehouse, real-time information