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Simplifying Design & Supply Risks

When I am attempting to improve a process or define a strategy, I am concerned with the amount of effort, resources, and time that will be spent or saved. After assessing the tradeoffs and determining whether the initial effort should be pursued, I can approach the actual work with a level of confidence that will help promote or justify whatever decisions I have made. This is assuming I have the information or resources necessary to make a correct analysis.

In any supply chain, both knowns and unknowns must be factored into overall and individual decisions and plans. The more visibility I have over the entire length of the chain, the more informed my strategy will be. Decreased visibility will raise the risk of a bad decision or incomplete strategy. If I am going to base actual efforts or establish real dependencies on the resultant plans, I better be sure I can anticipate all the risk possible and have some manner of backup or contingency plans in place.

Alternate sourcing is the most obvious contingency for materials issues. If I can buy from multiple suppliers, my product availability is on safer ground. If I cannot, how do I minimize my outages without a huge bankroll for risk or contingency buying? What are my alternatives?

I need to ask some very essential questions. First, I will go to the source that generated the requirement. In most cases, that is the design engineer. I will ask the engineer if there is any way to modify the design to eliminate the hard-to-find part. If the answer is no, I will ask if there are several parts that can be used to replace it. If the answer is no, I will ask if the technology in the design can be replaced while achieving the same results. If the answer is still no, I will inquire as to the benefits of the new design to the product's feature set. If the component or assembly is essential to the feature, I will ask marketing if the feature is absolutely necessary to fulfill a customer's requirement. If it is an add-on feature, maybe the customer doesn't need it, because 99 percent of the customers wouldn't use it anyway. It may be just a nice-to-have feature.

This line of thought may seem intrusive, but be careful of designing anything that is overdeveloped. Sometimes if the feature enabled by the hard-to-find component is not essential to the overall function, the feature can be designed out, and the product's cost can be lowered.

The supply chain is a function of both supply and demand. Sometimes the best strategy for increasing demand is to reduce cost. Sometimes cost can be reduced by eliminating features. Sometimes features can be eliminated by watching for the engineering phenomena known as creeping elegance or feature creep. This usually happens somewhere toward the middle of the design or development process, when someone asks, “Can you add this function or feature?”

The additional feature was never part of the original product requirement document, and feature creep costs extra engineering hours and resources. When engineering has the design reviews, make sure marketing is represented. It may opt out of an additional feature if it would delay the product's delivery. Meanwhile, back at the purchasing department, the pressure is off, and life returns to normal.

If this sounds too complicated, remember it all started by asking a few questions before kicking everyone into high emergency gear. Take the time to ask the questions. Watch for feature creep, and by all means, understand that your best supply chain strategy begins by making sure your internal operations don't surreptitiously generate any unnecessary demands.

Generally speaking, the shorter the chain, the more manageable it is. If you eliminate noncritical links by identifying paths and tributaries that need not be taken, you are already ahead. Creeping elegance is best combated by the elegance of simplicity.

5 comments on “Simplifying Design & Supply Risks

  1. prabhakar_deosthali
    December 6, 2012

    Douglas,

    One of the biggest hurdles in the steps to simplify Design and Supply risks is the partitioning of various departments and the support to this compartmentalization by the top management.

    As my experience goes, the management wants to keep control of everything and in that process it many times encourages rivalry ( not the healthy competition ) between various departments.  Add the personal egos of the design engineer ( who sometimes even refuses to listen to his boss), the sales engineer ( who will emphatically say that without a certain feature that he wants in the product, the product will not sell) , the costing engineer  and all those involved and you have a perfect show which will rival even the political debates .

    Many times it is also that using a unique part in your design makes it harder for the competition to decode your design and copy your features in their design – So is the belief of those egoist design engineers

    To overcome all these hurdles and to arrive at a simplified design is a herculean task.

  2. hash.era
    December 6, 2012

    Simplifying the design will definitely improve effectiveness of user inputs and definitely there will be less errors so automatically risks get reduced

  3. Roberto Varela V
    December 6, 2012

    Douglas:

     

    Generally we will ask up to question #3, the interaction we have with Design engineering is good and one of our on-going goals is to influtiate design with our strategic AVL, however this is not always possible.

    Getting a deep view into marketing is not something we could have easily and I do not believe we need to go there, sometimes we just need to have a clear understanding of the technology we need and the inherent risk. 

    Something that is clear is that if we got involve in early phases of design we could bend things our way easily so that is something I could recommend to any component engineer or AVL team.

  4. dalexander
    December 6, 2012

    @Roberto…As I am sure you already know, the best time for a CE to get involved at the design stage is in the first product definition stage where the Product Requirement Document is defined. I was part of one company that insisted that the DEs use as many parts from the PPL as possible. If they were going to use a non PPL part, we asked for plenty of notice to determine the viability of the part selection in terms of availability and cost. I mentioned Marketing because one of the designs used an adaptive equalizer for long cable lengths and when we could not get the part, Marketing waived the requirement for the customer because they were using a very short cable run. In the subsequent spin, we made the AE a stuffing option and selected two different packages with a dual footprint on the PCB.

  5. SP
    December 7, 2012

    Risk analysis and risk mitigation are the key elements in any project management. And for any product to manfucture in time, meet the quality standards and be in the budget constraints, its very important that supply chain management risks are well taken care of. After all if you dont get components in time you cant anything with your good deign.

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