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Enhanced Visibility Key to Supply Chain Efficiency

As Tier 2 OEMs in the high-tech industry continue to expand their manufacturing footprint across multiple geographies, managing operational execution along multiple points in their extended supply network becomes increasingly complex. In many cases, an OEM's manufacturing strategy uses a combination of multiple contract manufacturers (CM) and wholly owned subsidiaries. Each of these globally dispersed sites receives or generates independent data streams related to demand signals, forecasts, sales orders, supplier purchase orders and input, and finished inventory.

In an environment of high demand volatility, rapid obsolescence cycles, and shifting raw material lead times, visibility into the extended supply network becomes critical for anticipating supply disruptions and responding to demand fluctuations. Visibility is required into all elements of the supply chain: plan, source, make, and deliver. OEMs realize that in the absence of timely visibility, the performance of their value chain suffers. With dispersed manufacturing sites using different ERP systems, the challenges get compounded.

Until recently, OEMs responded to the challenge primarily by implementing data solutions that included some combination of spreadsheets with hundreds of data points, in-house developed applications, and third-party solution providers. Their experience has been that each solution had some inherent drawbacks, such as the ability to manage complexity, scalability, depth, and timeliness of information visibility; limited analytics; or significant upfront investment. Increasingly, global distributors such as {complink 577|Avnet Inc.}, with an extensive worldwide infrastructure and footprint, are offering solutions that address the above drawbacks and offer real-time visibility into transactional and analytical data points across the extended supply network.

Avnet's experience is that the combination of product-centric value-added services, along with information and analytics services, offers a significant value proposition to Tier 2 OEMs with dispersed and complex supply networks. The combination helps simplify the supply network design and provides a coherent global view of transactional and analytical data across the OEM's extended manufacturing footprint. Avnet's solutions are being leveraged by OEMs to:

  1. Manage planning, procurement, and inventory for globally dispersed manufacturing sites through Avnet-managed physical or virtual hubs, combined with on-demand access to aggregated information and analytics through secure portals.
  2. Manage supply variability and (or) demand variability and improve response to unforeseen events through movement of inventory between Avnet-managed hubs by leveraging real-time visibility into data points such as raw material forecasts, supply commit dates, inventory levels, and constraints.
  3. Receive on-demand access to data points related to spend, supplier performance, component lifecycle management, and on-time performance aggregated across the multiple sites.
  4. Conduct scenario planning related to supply network agility and responsiveness across the extended supply network, and leverage this information for demand shaping.

I recently attended a meeting of supply chain executives representing a wide breadth of industries, including chemicals, auto, industrial products, packaged food products, electronics, and healthcare. Not surprisingly, most industries share the same challenge — deep visibility into their globally extended supply chains. If you face similar challenges in your complex and geographically dispersed supply chain, I invite you to share your experiences and insights.

1 comment on “Enhanced Visibility Key to Supply Chain Efficiency

  1. DataCrunch
    October 4, 2011

    Hi Lalit: I have commented in the past on the importance of supply chain visibility, which has become kind of a hot topic recently in the industry.  There are many challenges, since many of the systems within the supply chain from suppliers to vendors to customers to end users can be numerous and disparate.  These challenges also provide opportunities for innovative and agile supply chain software companies.  Thanks for the informative article.

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