The perils of supply chain management: experienced veterans share their techniques and solutions to a more efficient supply chain

Automotive Industries,  August, 2003  by Brent Haight

• E-mail
• Print
• Link

Let's face it, managing a supply chain today isn't an easy pill to swallow. While improved technology provides better tools to do the job, the more steps there are in getting products from point A to ultimately point C--the customer--the more there is to go wrong. today's economic conditions and political unrest around the globe are Only adding to the challenges of maintaining a global supply chain. Automotive Industries had the opportunity to sit down with a number of the speakers at this year's AutoLog 2003--a conference dedicated to all aspects of supply chain management--we spoke with representatives from OEM and supplier relations to transportation and logistics providers, to IT providers and service parts distributors. While all agree that there are better tools today to equip companies with the ability to better manage their supply chain, everyone admits, there is still plenty of room for supply chain efficiency improvement.

"The key to supply chain is time," says Ramzi Hermiz, senior vice president, global supply chain, Federal Mogul Corp. Federal Mogul's 95 percent fill rate is among the industries highest. The company has operations in 24 countries. "Everything is cause and effect. Time reduction is the cause. The effect is lower cost, lower investment and higher delivery performance. If you take out time, you are doing it faster, you can improve performance and you can take out the investment.

"When Federal Mogul reevaluated its supply chain, we looked at how we could take out time. Because in the end, that is really what the customer is looking for. They want efficiency from the standpoint of when they ordered it to when they get it."

Solutions for improving supply chain efficiency and lowering overall costs--the two biggest trends in supply chain management--vary depending on who you talk to.

The IT Approach

Most organizations have data stored and captured in multiple systems, making fast and strategic decision making a challenge. According to Mark Arduino, senior industry consultant, automotive/manufacturing at Teredata, achieving complete supply chain visibility and systems integration is the key to a more efficient and productive operation.

Teredata, a division of NCR Corp., provides data warehousing and enterprise analytic technologies and services.

"A single view of your business is a coined phrase that we use, but what we mean by that are a couple of things. Most organizations have data stored in various places, making decision making a challenge. Having to independently gather all of the data limits your ability to respond quickly and confidently.

"Leveraging a data warehouse," says Arduino, "what you end up doing is integrating all of this independent data and data sources together from these multiple systems. So what you get is this integrated view that leverages your entire enterprise. And now I'm speaking even outside of supply chain, tying in financials with supply chain; tying in quality with supply chain; tying in quality and everything else so that you get an enterprise view, or an understanding of the information.

"Basically it ties together the systems that will forecast what will happen with the reports that tell them what actually happened."

According to Arduino, the integration of the dispirited systems will give you the visibility across the entire supply chain, from your suppliers to your customers. Integration will allow you to respond quickly and confidently across all segmentation--suppliers, logistics providers, manufacturers, distributions centers, dealers and openly to the customer.

"With the single view you can get a snapshot of what I call the health of the system," says Arduino. "People can now work on solving problems associated with performance metrics instead of spending inordinate amounts of time trying to collect the data. Technology is allowing people to spend the time managing the system and solving the problems instead of collecting data in order to try to solve the problem.

"If you can integrate all of your systems," Arduino adds, "it really is a change agent or adaptation to ever changing business requirements. That's not to say that the model changes, but as a company becomes more lean and as new supply chain initiatives are kicked off, there is always more and more data required to assist them in their endeavor. By integrating the system, you are not constrained by the technology."

Visibility across the supply chain is more than the visibility of the dispirited systems. It is the ability to also get detailed data. Looking at summarized data is okay, says Arduino, "but in order to solve your business problems, you have to be able to drill down, to really identify and get to the point of cause. I say point of cause and not root cause because root cause is something that somebody has to do to fix something. The point of cause guides you to the area."