Today’s economic reality highlighted by volatile commodity pricing and widespread supplier financial instability adds to an already complex set of supply chain risks and challenges for manufacturers.

Overview

The current manufacturing environment is characterized by intense international competition, rapid product innovation, turnover and obsolescence, extreme supply & demand variability and significant structural changes in response to new manufacturing strategies and operating models.  It is generally accepted that these changes in the manufacturing environment should be accompanied by organizational and process change to appropriately support a vastly different risk profile. However, it has been very difficult and complicated to do so without management commitment to the strategies and tools needed to successfully operate in this dynamic environment.

Navigating Supply Network Complexity

It would be difficult if not impossible today to find a manufacturing company that produces 100% of its products internally. Across industries, OEM’s (Original Equipment Manufacturers)/Brand Owners have steadily shifted their organizations and resources towards activities that competitively differentiate their products and services in the market, and outsourced non-core activities to external partners-suppliers.   Outsourcing has become so widely adopted, that it can no longer be considered a trend but a necessary business strategy that each manufacturing company must adopt to compete successfully.

This has led to a significant transformation of the traditional linear supply chain structure of the vertically integrated manufacturing enterprise.  The responsibility and control of a large portion of production parts, components and assemblies, once an internally managed set of activities, has been delegated to contract manufactures and their extended supply chains. As a consequence, OEM’s/Brand Owners no longer maintain the same degree of visibility or control that they once had over cost drivers that directly affect the price and delivery of their production parts and finished goods, exposing them to new set of operational and financial risks.

Implications

Successfully navigating this complex supply environment and managing the inherent financial and operational risks has posed significant challenges for OEM’s and their Supply Networks. Supported by enterprise-centric systems and processes that were not designed to manage the complexities of operating across multiple enterprises, geographies, and through n-tiers of supply has proved ineffective in combating:

> Extreme variability of supply & demand.

> Commodity & raw material volatility.

> Sharp price performance swings of standard parts/components.

> Unforeseen capacity constraints or bottlenecks at critical points throughout the Supply Network.

> Widespread financial instability throughout the supply base.

This has led to resource intensive and costly fire-fighting activities that directly affect earnings certainty.  It has also highlighted the changing role of purchasing and supply chain organizations, not only in function, but in overall importance to the competitiveness and performance of the company.

Attacking the problem with Newview

OEM’s / Brand Owners must first develop a sufficiently accurate understanding of critical parts of their extended value chain. We provide the products, solutions and supporting processes that allow our clients to achieve this by reconnecting their finished products demand to the parts, materials, operations and process throughout critical area of their extended value chain.  Through our data driven approach, our clients can consolidate their aggregate ‘network’ part-material requirements, communicate & leverage their demand; and implement the processes, controls, and ongoing metrics to safeguard supply certainty while achieving sustainable cost savings.