Page 14 - MetalForming December 2013

Best Practices
By Bob Dobrowsky
Four Ways to Manage Supply-Chain Challenges
Supply chains must continue to meet the challenges and everyday pressures that always have existed— reducing costs, demanding higher quality, improving lead times and responsiveness, and reducing risk.
Today’s supply chains face additional challenges above and beyond those, including:
• Increasing complexity and global networks
• Increased volatility
• Shrinking product lifecycles
• Increasing customer demands and expectations
• Intense pressure to reduce costs throughout the supply
chain
• Accelerated product innovation
• Race to new markets
• Increasing risk profiles
Today’s supply chains must be more responsive than ever
to these challenges and to dynamic conditions. Traditional techniques and approaches that support predictable business models no longer suffice. To manage today’s supply-chain challenges, manufacturers should start by focusing on four areas:
• Improve supply chain visibility.
• Become more agile.
• Focus on risk management.
• Develop/align the supply chain organization and talent.
Improve Visibility
According to a recent poll by Gartner, Inc., an information technology research and advisory company, supply-chain vis- ibility and event management is the top supply-chain man- agement application for 2014. However, the adoption of supply-chain visibility by most manufacturers has been slow, despite the desire to move in this direction. The goal should be to obtain visibility into key data sets that span across the extended supply chain, in a timely or real-time basis. Achieving this level of visibility is a precursor to the next area of focus—becoming more agile and flexible.
Bob Dobrowsky is a partner with the Cleveland office of Plante Moran, PLLC, and is one of the leaders of the firm’s Ohio Manufacturing and Distribution prac- tice. He has been delivering professional services to privately held companies for the past 21 years. Bob has authored the annual PMA Benchmarking Report since 2003, serves as a member of the board of directors for PMA’s Cleveland district, and has pre- sented at various district level meetings. www.plantemoran.com
Bob.Dobrowsky@plantemoran.com
Become More Agile
Supply-chain agility is recognized by most as a critical pri- ority to overcome today’s supply-chain management chal- lenges. However, oftentimes the very initiatives organizations undertake to either compete globally, respond to customer demands or reduce costs can lead to inflexibility.
For example, consider a manufacturer that decides to reduce costs by outsourcing some of its production, engi- neering or logistics functions. This equates to loss of control, and as the organization gives up control, it becomes less flex- ible. This in turn hinders its ability to respond quickly to changes in its internal or external environment
Supply-chain agility refers to an organization’s ability to quickly adjust its plans, tactics and operations within its supply chain, to respond or adapt to changes in its environ- ment. Transforming into an agile supply chain requires attention in five essential areas (see the accompanying side- bar): anticipation and awareness; visibility; responsiveness; speed; and flexibility.
Manage Risk
The focus on globalization and intense cost reduction is increasing the risk in today’s supply chain. Manufacturers
Organizations now are being more deliberate with their approach and strategies when determining what should be off- shored, near-sourced and onshored. Consider the automotive industry, where 30 percent of the global volume in the industry
Flexibility
Speed
!
Anticipation/ Awareness
Visibilty
Responsiveness
Supply-chain agility requires enhanced critical thinking and decision-making skills.
currently is on a multi-continent platform. By the end of the decade, that per- centage will grow to 50 percent.
Today, the mid-Mexico
region is a hotbed for new-vehicle production capacity as OEMs seek to reduce logistics costs, inventory and, ultimately, risk.
The investment by OEMs in mid-Mexico has in turn created pressure on motor-vehicle parts suppliers to grow their capa- bilities in this region. The challenge will be to balance the additional risk they’re taking on due to global expansion against their changing customer requirements.
12 MetalForming/December 2013
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