Today’s manufacturers have to operate in a highly pressurized, customer-centric world of ever-increasing complexity. While endeavoring to meet customers’ high expectations around product quality, availability and rapid delivery, manufacturers are running intricate global supply chains involving multiple layers of supply partners. To continue to delight customers, manufacturers require complete real-time visibility into and control over every single aspect of their supply chain, whether within their own operations or those of their partners, no matter where in the world those facilities are located.
However, many manufacturers are effectively held back from realizing the promise and consequent benefits of full real-time transparency and control by the very systems on which they run their supply chains. Too often, manufacturers have amassed a variety of disparate and niche supply chain products over time which are inflexible and have little to no integration with each other. The result is organizations unable to gain an accurate, full and clear data picture of their entire supply chains on which to base short-term and long-term decision-making and planning. Instead, such manufacturers are presented with a fuzzy, incomplete data jigsaw puzzle where the same pieces of information may be duplicated several times and there are gaps where other data ought to be visible and connected.
Welcome to the Omnichain
I’d like to suggest a way for manufacturers to rethink and redefine their underlying supply chain operations. Instead of separate links in a chain, which sets the stage for a linear mix of disparate systems, think about an ‘omnichain,’ one single cloud-based environment built around a unified data set which fully integrates all supply chain business processes wherever they occur. I’m talking about all supply chain processes, whether they begin and end entirely within a manufacturer’s manufacturing plant or warehouse, or solely within the facilities of one or more of the manufacturer’s partners, or are initiated in one location and complete in another locale.
The omnichain brings all those processes together and enables data gathered by those processes to flow freely across the entire environment. In the omnichain, everyone at the manufacturer or its partners who is a stakeholder in one or more supply chain process will have access to all the relevant data in real-time which they need for their role within the entire supply chain.
How Cloud Facilitates the Omnichain
Cloud-based applications are built with agility, flexibility and scalability at their core, so they are suited to enabling and supporting the omnichain. Cloud applications are not set in stone; they are designed to be easily customizable. Software-as-a-service (SaaS) supply chain management applications are beginning to achieve functional parity with on-premise SCM software. The cloud application services SCM market is growing at a compound annual growth rate of 18.1% from 2013 through 2018 and is set to become a $4.2 billion opportunity in 2018, according to industry analyst firm Gartner.
Taking a cloud approach also allows manufacturers to be up and running with their re-envisaged supply chain quickly and doesn’t require the IT costs, time and maintenance overheads of some on-premise systems.
Benefits of the Cloud-Based Omnichain
Akustica (Bosch) is a provider of microelectromechanical systems (MEMS) microphones used in mobile phones, laptops, tablets and small wearable accessories such as headsets. With headquarters in Pittsburgh, Pa., Akustica, a wholly-owned subsidiary of the Bosch Group, has a geographically-diverse supply chain encompassing both in-house and third-party factories and warehouses in the United States, Europe and Asia.
The microphone manufacturer manages end-to-end production and fulfillment in a cloud-based supply chain solution with full integration to both financial and inventory management. For Akustica, the cloud-based business management suite functions as the manufacturer’s data warehouse, a single unified store of information gleaned from its entire supply chain, including information about goods in-transit on air shipments.
Every manufacturer embracing the cloud-enabled omnichain has their own specific benefits they are realizing, but generally speaking, the following are some of the top advantages:
- A reliable, real-time single source of data truth. Manufacturers can confidently use the information from the omnichain to make decisions, to plan, and to assess and compare supplier performance. With a complete unified set of supply chain information at their disposal, manufacturers can also more clearly communicate and collaborate with their supply partners and directly with customers. Manufacturers can eliminate guesswork or gut feelings and replace them with a unified set of accurate, real-time data to improve demand sensing and responsiveness.
- Increased flexibility. I’m talking about the ability to tailor streamlined omnichain supply processes to the needs of an individual company. For instance, manufacturers are having to change long-established businesses processes on the fly to fulfil and then refresh smaller runs of products more frequently—all within a more compressed time to market.
- Full control and location irrelevance. With the omnichain, manufacturers are able to manage their entire supply chain operations no matter where those facilities are in the world or who owns them. As manufacturers and their suppliers work more closely together and share more information, third-party logistics providers (3PLs) and other partners effectively become a virtual part of the manufacturer’s own organization.
- Future-proof and drive innovation. Manufacturers are also challenged with how to stay one step ahead of the competition, particularly with the emergence of newer technologies and indeed brand-new global rivals. By reinventing a flexible, customizable supply chain, manufacturers are optimally placed to change their business model and focus on an as-needed basis in response to new technologies, competitors and changing customer buying patterns. One trend that will cause continued disruption is the move towards personalization where customers have more input in how a manufacturer’s products are designed and tailored for individuals.
In conclusion, adopting an omnichain approach to rethinking supply chain operations enables manufacturers to become proactive, rather than reactive, to changes both large and small within their supply chain and across their industry. We live in a world where increasingly we can access relevant information in real-time from anywhere at any time—manufacturers should be able to apply that same type of thinking to their supply chains.
Gavin Davidson is manufacturing vertical lead with NetSuite (www.netsuite.com), a provider of cloud-based financials/ERP and omnichannel commerce software suites. With 25 years of experience, he is charged with utilizing his understanding of the product, market place and customers to increase sales, improve customer satisfaction and retention and drive the solution maps for partner and product offerings. Prior to joining NetSuite, Davidson initially completed an apprenticeship in production engineering before taking on several consulting roles implementing a variety of manufacturing software products such as Epicor, Microsoft Dynamics, Experlogix and Visual Manufacturing.
