In today’s competitive landscape, electronics OEMs know that being first or being best are not enough. Real winners capture both quality and timing wins. Increasingly, the supply chain is a telling aspect of which companies will capture operational excellence and innovation.
Recently, a panel of industry leaders gathered as a panel at the Modern Supply Chain Experience hosted by Oracle to discuss the ins and outs of how to capture business leadership through a cleanly integrated end-to-end supply chain. The panel consisted of Rubik Babakanian, senior vice president and chief procurement officer, Western Digital; Chris Neff, senior director, supply chain systems, NCR Corp.; and Mo Khurana, vice president global management consulting, Inspirage. Roddy Martin, vice president, SCM Cloud Product Marketing at Oracle moderated the panel.
They key to moving up through the five stages of supply chain maturity depend upon moving from an inside out approach to an outside in to achieve optimal agility, said Martin. “We don’t wake up one day and decide to change the supply chain,” he added. “It’s about building capabilities over time.” Today, electronics OEMs get information from a variety of sources, including social media, customer insights, and marketing data. These sources provide new kinds of insights about demand for products and even supply chain glitches that organizations need to react to quickly. As the image below illustrates, the goal is to move from reactive to proactive, a path that ultimately demands leveraging digital and cloud capabilities.
Today, only one out of five OEMs have reached this level of supply chain transformation, though. To achieve a leadership position, organizations need to be willing to change and do things in new ways—and they need to leverage data in new and intelligent ways. “We had a tremendous amount of transformation in and around our organization that we had to align to,” said Babakian of Western Digital, which grew both organically and through acquisition. “Our level of collaboration wasn’t homogenous or harmonious and the planning cycle time from demand signal to commit were longer than expected or desired. There was a need to focus on cost.”
Western Digital realized that it needed better visibility to achieve lower cost modes of business to achieve the level of cost performance needed to thrive, Babakian said. Western Digital manufacturers in 14 regions and uses more than 200 suppliers. “We underwent some severe industry risk from natural disaster that affected us and others around the world dramatically. We realized that we wanted to improve risk mitigation and management.”
Further, today’s organizations realize that they need to transform to meet the changing needs and wants of customers. “Traditionally, our business has been hardware driven but we are moving to software and services as well to provide the full spectrum,” said NCR’s Neff. “To do that, we needed to approach sales, delivery and service differently. It’s all about data.”
Digital is the key word in the conversation, agreed Inspirage’s Khurana. “Everyone needs to have a digital supply chain strategy,” he said. “When we asked our customers how digital and cloud can help them, we heard three key things: that it gives the organization to understand return on investment and what direction to go; that integration is critically important; and that the strategy has to deliver agility.”
The panel identified some key attributes that made their efforts successful:
- A strong end to end strategy must be measurable and actionable. “We need to help our customer understand before they begin how their supply chain is performing compared to their peers,” Khurana said of Inspirage’s consulting work.
- A successful program has dedicated people. “We actually pulled out people this year and dedicated those folks to transformation, and we have dedicated teams working on master data; metrics; cross-solution delivery; sales and operation planning (S&OP); master data management; and product life cycle management (PLM),” said Neff. “You have to make sure you make the decision and invest in transformation by putting people, projects and processes in place.”
- Start with clear goals and understanding. “When we started our journey we had two or three false starts and that was costly and took time to recover,” said Babakian. “Before you start, you have to understand the goals of the business overall and enlist top down business commitment to undertake the change. You have to understand where you are and where you want to go. Change management and data management are extremely important.”
Where is your organization in the journey to supply chain transformation? What lessons have you learned? Let us know in the comments section below.