Amber Stokes finds out how key IT trends are helping to give manufacturers complete visibility into their supply chains.
While supply chain visibility is top of mind for manufacturers, the complexity of today’s operating environment has made it more important than ever. Globalisation is one of the biggest culprits of this complexity, bringing greater competition and requiring manufacturers to transform their businesses more frequently, more drastically and faster than ever before.
According to Enrique Andaluz, Microsoft’s industry solution manager, worldwide discrete manufacturing, this is relevant from all angles of the supply chain. “More knowledgeable consumers demand differentiated products and services that satisfy their personal needs, which puts manufacturers under pressure to deliver more high-quality products and services faster. To achieve speed and differentiation, manufacturers need to better collaborate with all the many people and organisations that make up the supply chain – and quicker,” he says.
Sam Youness, worldwide industry technology strategist for process manufacturing and resources at Microsoft, agrees, adding that globalisation has, in fact, increased the importance of visibility into the supply chain and also made it a lot more difficult. “The distributed nature of manufacturers’ supply chains means that they have to work with suppliers across multiple language and geographic boundaries, while also trying to work in a leaner and faster manner to deliver their products,” he says.
On top of the cultural differences and challenges organisations face with communicating and shipping across different time zones and long distances, Youness says there are also technical problems when trying to gain visibility into the supply chain. “Manufacturers often need to integrate different systems, some of which are legacy or inherited through mergers or acquisitions, and some are at their suppliers and customers,” he says. “This integration, although not easy, is crucial to make business process flow smoothly across such systems. All of these difficulties mean increased costs for the manufacturer.”
“To address globalisation challenges, advanced organisations are exploring the advantages of connecting people to the information they need in order to control assets and supply chain processes in real time,” says Andaluz. Achieving success via better connectivity to a sensor-enabled supply chain also means that the amount of information collected today has grown exponentially.
“This of course carries many benefits – such as reduced operational cost due to better visibility of the distributed inventory; and improved product quality due to improved strategies like moving from reactive to predictive maintenance – but it also carries much complexity,” says Andaluz. “Considering all the participants involved in a supply chain within one organisation – and the information that is shared throughout – this amount of data is incredibly complex to manage and difficult to personalise before organisations convert this information into a competitive weapon.
But why is improved visibility into the supply chain so important? “It’s essential to trace the location of feed stock or raw materials, or the parts and the finished goods – right up to when they are sold,” says Youness. “If you know where they are, you can run a much leaner inventory and reduce your costs. It also means you can satisfy customer orders quicker and even provide customised products or services – which is a must in today’s consumer-driven world.” Furthermore, Youness adds that it also means manufacturers can get valuable insights that allow them to be prepared for any problems that might arise, to react quickly and reduce their impact. These insights could also be used to prevent problems before they happen.
In order to facilitate supply chain visibility, many of today’s manufacturers are taking advantage of four key IT trends: cloud computing, big data, mobility and social.
Cloud computing allows improved interaction between all the key people involved in the supply chain across the globe and breaks down the silos that so often prevent manufacturers from having full visibility across their supply chain functions. While cloud deployment has the potential to transform manufacturers’ supply chain operation, its adoption is only just starting to be seen. Eduard Marfa, director for EMEA marketing, Teamcenter at Siemens PLM Software says that most CIOs are interested in and understand the benefits of the cloud, but aren’t yet moving their entire product lifecycle management (PLM) systems to it. “In the future, we see cloud computing as a huge factor in allowing manufacturers improved visibility into their supply chain,” says Marfa. “That’s why we’re making Microsoft Windows Azure one of our preferred platforms. It makes IT deployments very easy wherever you are in the world, so manufacturers don’t need to worry about how they can deploy a system in different countries. It also allows collaboration with suppliers at an affordable cost.”
With all of this increased collaboration between the many different players across the supply chain, comes a rise in data requiring a move towards big data management technologies. “People will be collaborating in many different ways and using many different devices,” says Youness. “It might be via a phone call, an e-mail or social media technologies. Data generated and collected through these processes is both structured and unstructured. There is a need to manage and analyse the data better to allow manufacturers to derive the necessary insights to make better decisions. And better decisions means optimising the supply chain and reducing costs.”
“Disparate pieces of information are held everywhere,” says Bob Gates, GE Intelligent Platforms’ manufacturing market director. “Manufacturers have previously had more data in more places than they had visibility. But poor visibility can sometimes mean that manufacturers don’t keep on top of customer demand and end up producing products that aren’t right – which means wasted costs.”
GE Intelligent Platforms offers high speed data collection solutions that help manufacturers visualise and analyse this data quickly. “Our Proficy solution bundle can sit on top of the systems manufacturers already have but that don’t have the capability to allow for fast data analysis,” Gates says. “With Proficy Historian, anyone within the supply chain can have access to the data and instruct people through their operations so that the supply chain becomes a lot more connected.”
The modularised make up of Proficy solutions means manufacturers can choose the applications they need. “With Proficy Mobile, people across the entire supply chain can have access to this data in real time on a mobile device,” Gates explains.
Mobile solutions like this have an increasingly important role to play. “Mobile solutions are allowing players in the supply chain to understand as a whole all the independent information nuggets coming Andaluz. “And that’s because all of this data can be rendered onto any screen – phone, tablet, desktop and boardroom – as a complete ‘contextual situation’ which means that people are able to understand business situations wherever they are.”
Youness explains that this is why Windows 8 is proving to be a popular choice in the industry. “Many manufacturers are excited about Windows 8, as they embrace mobile devices. They can use a Windows 8 tablet or a Windows Phone as a personal computer with the full power of Microsoft Office and the necessary security, manageability and reliability, making such devices more attractive over other tablets and smartphones,” he says.
Recognising the importance of this, Siemens PLM Software has made a big investment in mobility. “We invested in mobility over four years ago and we’ve seen that nearly every customer in the industry is now deploying a mobile solution of some kind,” says Siemens PLM Software’s Marfa. “Our new solution, Active Workspace client for Teamcenter software is capable of opening up PLM data to any system including mobile devices such as Windows 8 tablets and Windows Phone.”
Marfa explains that, ultimately, the benefits of this level of visibility into the supply chain can be extended to the manufacturers’ customers also. “Our mobile solution allows our customers to make better decisions by having visibility into the right data at the right time,” he says. “And this kind of insight can mean that a manufacturer can deliver better products and improve the time to market.”
Finally, social media can be used to enhance collaboration even further and promote the capture of people’s knowledge. “Using social media and enterprise social technologies, such as Yammer, you can ask questions and get in touch with people who have had the same problems,” says Youness. “This kind of knowledge sharing can prevent problems from occurring in the supply chain, reducing costs and allowing manufacturers to deliver the right products quickly.”
Melissa Cook, senior director and global manufacturing industries lead for Microsoft Dynamics, says that the trend of ‘social manufacturing’ is now entering the industry. “World-class manufacturers have always had a relentless focus on meeting the needs of their customers at the front end, and improving connections to their suppliers at the back end,” Cook says. “This is where social comes into play in manufacturing – as a tool to listen to your customers in real time, anticipate change and connect the supply chain in ways we’ve never been able to do before. In addition, social provides exciting new ways for employees, customers and partners to collaborate and innovate in product and process. Microsoft was born in personal computing and social is a great fit for us and the Dynamics product line.”
To get the most out of these four IT trends, organisations must combine them all together. “When organisations experiment with one of these trends alone, they take advantage of improving their business in only one aspect at a time,” says Microsoft’s Andaluz. “Within the supply chain, probably more than 80 per cent of practitioners are completely disconnected from real-time information and from peers as well as disconnected from processes and assets. An organisation might provide these people with mobile devices to allow them to view data, but if they don’t give them the ability to control processes and assets to fix problems by using this information proactively, then they will not be able to resolve any issues. Those manufacturers that recognise this – and reap the benefits of combined cloud computing, big data, mobility and social technologies – will lead the way long into the future.”