We are seeing growth in the complexity of supply chains as manufacturers continue to globalize in order to reduce costs and expand their market. With this shift, manufacturers need to take a new approach to managing their supply chains by finding ways to communicate with suppliers, receive early visibility into sourcing information and better mitigate supplier risk.
Most commonly, supplier information is managed in a Supply Chain Management (SCM) or Enterprise Resource Management (ERP) system where information is maintained for products that are in production or even in a prototype phase. Information at this phase of a product’s lifecycle allows manufacturers to determine production costs, delivery dates, and analyze supplier performance. However, many manufacturers are now implementing ways to gather and analyze information earlier in the product’s lifecycle, during the planning and design/development phases. This is where Product Lifecycle Management (PLM) comes in.
PLM Provides Early Visibility
PLM technology, at its core, provides a centralized environment to manage all product associated information from concept through obsolescence. New product ideas and redesigns as well as new component/part requests originate in the PLM system. PLM takes a comprehensive approach to managing design and development data including; Bill of Materials (BOMs), engineering changes, documents, Approved Manufacturers Lists (AMLs) and Approved Vendor Lists (AVLs), quality, training requirements and projects.
PLM systems provide a platform to read and write data to various systems, such as ERP and SCM and enable secure access to all members of the enterprise as well as the “extended enterprise” (suppliers, partners, contractors, etc.).
Having supply chain personnel involved early on in the development phases of a product allows manufacturers to perform cost, availability, and feasibility analyses to determine the viability of a project. Early visibility also allows manufacturers to begin the relationship and contractual development process with new suppliers/vendors while the product is being developed without having to wait until production is ready. In addition, using PLM lets procurement update product record data such as costs, lead times, vendor/part statuses, and past supplier performance, thus helping engineering to make better design decisions and reducing redesign costs.
Mitigate Supplier Risk – Managing Supplier Audits and Quality
Manufacturers must constantly evaluate their Supply Chains for quality and compliance. Supplier Audits are a common way to ensure that a supplier is following the processes and procedures that were agreed to during the selection process.
PLM software provides a closed-loop, Quality Management system that helps manufacturers capture all issues and relate them directly to the product records. This supplies manufacturers with the ability to aggregate data from multiple product lines and across all suppliers to produce reports for non-conformance and isolate problems in the supply chain.
With the growing emphasis that manufacturers are placing on analyzing supplier performance and reducing costs and risks, leveraging PLM systems to drive this analysis earlier in a product’s lifecycle is a key component to ensuring the success of a product… and sometimes the company itself.