Executive Briefings

Supply Chain, 'King' of Manufacturing, Has Highly Complex Job to Do

Most everyone in manufacturing is aware that today, supply chain is, more or less, "king" of the manufacturing lifecycle. With more globalized supply chains and the trend of working with more and more third parties, it's critical that manufacturers keep a strong hold on the flow of materials from one location to the next.

This is even more important in the automotive world, famous for using a dizzying number of suppliers to make even the smallest components of a vehicle, which are often manufactured in a dozen different locations around the world. And for the rest of the manufacturing world, there's a lot that can be learned from the automotive world's process of trial-and-error.

Diane Palmquist, vice president of manufacturing industry solutions at GT Nexus, summarizes the situation well: "Supply chains, in general, are becoming longer and longer, both in terms of customers that are in emerging markets, and that sourcing is not even in BRIC countries "” it's going into emerging markets. The tail is longer, the front end is longer. Customers are less and less willing to wait for things. As customer lead times become shorter, and as manufacturing lead time and sourcing becomes long, it creates an environment that needs some kind of real-time platform to keep things running."

In the automotive world, companies are scrambling to expand manufacturing operations into new countries so that they can tap emerging markets. At the same time, they're expanding in their big, consistent markets "” think China or the U.S. "” while sourcing from an increasingly deep list of countries. Palmquist says many are, for example, buying fasteners from Nigeria, and those are just a few of the 26,000 parts necessary to make a given car. She says, "To try and find a way to not overstock in any of those parts, and have them all at the right time, is very difficult."

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This is even more important in the automotive world, famous for using a dizzying number of suppliers to make even the smallest components of a vehicle, which are often manufactured in a dozen different locations around the world. And for the rest of the manufacturing world, there's a lot that can be learned from the automotive world's process of trial-and-error.

Diane Palmquist, vice president of manufacturing industry solutions at GT Nexus, summarizes the situation well: "Supply chains, in general, are becoming longer and longer, both in terms of customers that are in emerging markets, and that sourcing is not even in BRIC countries "” it's going into emerging markets. The tail is longer, the front end is longer. Customers are less and less willing to wait for things. As customer lead times become shorter, and as manufacturing lead time and sourcing becomes long, it creates an environment that needs some kind of real-time platform to keep things running."

In the automotive world, companies are scrambling to expand manufacturing operations into new countries so that they can tap emerging markets. At the same time, they're expanding in their big, consistent markets "” think China or the U.S. "” while sourcing from an increasingly deep list of countries. Palmquist says many are, for example, buying fasteners from Nigeria, and those are just a few of the 26,000 parts necessary to make a given car. She says, "To try and find a way to not overstock in any of those parts, and have them all at the right time, is very difficult."

Read Full Article