Today’s Manufacturing Supply Chain Mess
Manufacturing was simpler 40 years ago when making a product often took place within the same four walls. The design team could gather with the manufacturing team, reviewing and revising a common set of technical data. Production planning was optimized based on capacities, customer needs and corporate strategies. The entire manufacturing process could be watched from offices overlooking the production floor, ensuring a swift response of all hands whenever there was a production problem.
Then it all changed.
Companies started identifying their core competencies, and outsourcing everything else. What was once often made by one company in one location was now made by a collection of companies scattered across the country or around the globe—today’s manufacturing supply chain.
Collaboration became more difficult as teams working for different companies were geographically dispersed with different tools and processes. Technical data became another barrier as different manufacturers had different software programs. True production planning was replaced by required delivery dates on purchase orders, reducing the ability for participants to optimize production schedules. Finally, no one group had a view into the production processes of all the manufacturing supply chain participants, so problems often weren’t known until it was too late to do something about them.
These issues have led to a number of challenges, particularly for U.S. manufacturers that typically have more supply-chain participants with a greater variety of disparate software programs that don’t communicate well. (More on that in a future blog.) Among those challenges include a lack of responsiveness, inhibited innovation, reduced resiliency and even greater costs.
Today’s manufacturing supply chains are improving, but still have a long way to go. Companies have done a great job of leaning out their own manufacturing processes, but that practice is often not applied across manufacturing supply chains. Standards, such as the Standard for the Exchange of Product Model Data (STEP), have helped improve the movement of technical data from one system to another, but they still fall short of what is needed for today’s advanced manufacturing. Cloud computing and software-as-a-service (SaaS) are promising technologies that can help overcome some of the communication and coordination challenges, but they still face huge organizational and behavioral barriers to really become effective. Finally, there remains much work to be done in structuring relationships between supply-chain participants so that strategies and priorities are aligned.
This blog will focus on these issues and others related to helping manufacturers better capitalize on the advantages of today’s distributed manufacturing enterprise while regaining the efficiencies of yesterday’s self-contained manufacturer.