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Supply chain event management – high priority for hi-tech
Hi-tech manufacturers face a tough task when managing their supply chain. Component suppliers, OEMs, distribution centres, channel distributors and the end customer all have to be considered. In a market that is driven by product innovation and ever-shorter product lifecycles, supply chain operations become a highly significant differentiating feature of successful companies. This is further compounded by a difficult economic climate. Supply Chain Event Management (SCEM) software is one solution that managers look to implement, in order to streamline stock inventory, speed up return and repair cycles, help manage third party logistics, warehousing and transportation.
Hi-tech goods can be made up of hundreds of different components that are often sourced from abroad, and undergo a number of sub-shipments before reaching their final assembly destination. Also, the build process is often more complex than the standard manufactured goods, as part-built goods and different specifications are commonplace in this market sector. Add to this the several different sales channels used within the hi-tech industry and you have a huge headache for the supply chain manager.
It is not unusual in this industry to find that just 80% of goods are delivered on time and in the correct quantity. High stock levels are purposely held to ensure that these shipment deficiencies do not cause any undue problems with meeting customer orders. Repair goods often have a return cycle that is barely satisfactory to the customer. These scenarios are becoming increasingly unacceptable in a world where customer-orientation is coming to the fore. As channels to market change and customers become the focus, the speed and accuracy of deliveries becomes increasingly important. Just think how much quicker the repair/return cycle could be if the repair house received detailed, early notification of inbound shipments and could pre-order replacement parts. What would that do to customer satisfaction?
Visibility is often where the supply chain in this industry sector falls down. Being able to look up and down the extended supply chain to see where unscheduled events are disrupting the execution of plans is largely viewed as a luxury that most companies would like to have. We see it not as a luxury, but as a necessity – essential for the efficient operation of all parties in the supply chain.
Supply Chain Event Management provides automated prompts to unexpected events at the exact time and at whatever point in the supply chain they occur. This is where hi-tech companies are able to make significant cost reductions. Excess inventory can be cut out of the supply chain entirely, rather than just being pushed back up the chain. Delivery times are reduced and ‘on time in full’ delivery figures increase, resulting in fewer invoice/payment queries and a significant improvement in cash flow. Furthermore, with a large emphasis on return and repair cycles in this industry, tracking and tracing of inbound and outbound individual product shipments will ultimately lead to superior customer service.
There are, however, certain business processes that have to be in place for hi-tech companies to truly reap the benefits of supply chain event management. Viewlocity was born from an integration background and has evolved into a company that now has the ‘bottom up’ expertise to advise companies on how to connect business partners, integrate business systems and work processes and ultimately streamline their supply chain. Allowing outside partners and suppliers to have visibility of the information contained within a company’s systems – no matter how controlled that visibility is – may be a painful psychological hurdle to overcome initially. Eventually it will become a competitive necessity if supply chain practitioners, particularly within the hi-tech industry, are to achieve their business goals.
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