John Johnston, NPI Director, Chemigraphic
Many OEMs are finding that with great power comes greater complexity.
The twin forces of globalisation and growth by acquisition are creating both opportunities and challenges.
And the one area where this is most apparent is the supply chain.
Factors such a rapid growth through acquisition has seen big players in the electronics market facing the challenge of managing, monitoring and coordinating quite literally thousands – and in some extreme cases tens of thousands – of suppliers.
What are the problems thrown up by complex supply chains – and how can a trusted EMS partner help you overcome these?
Facing the challenge of an extensive and complex supply chain
The issues faced are far from confined to electronics.
Athletics brand Under Armour recently massively boosted its margins through supply chain simplification. Its gross margins were up 170 basis points to 46.5% in the second quarter of this year, with the vast majority of this year-over-year gain attributed to supply chain efficiency.
“Moving forward, it’s all about staying disciplined, focused and methodical, working smarter,” said Patrick Frisk, President and COO.
How can EMS help you stay disciplined and focussed when managing your supply chain?
Supply chain issues have long been under the spotlight.
The electronics industry has faced several disruptions and disasters that have had a profound effect on the way OEMs need their supply chain to operate. These have included ash clouds, defective software, the need for customisation, bankruptcy and the ever-present risk of obsolescence. Manufacturers are painfully aware of how fragile their supply chain can be and the costs that these disruptions entail.
Add into the mix the dynamic of businesses growing through acquisition, when the parent company inherits each target companies’ individual supply chain and, over time, the supply chain danger has intensified. Far from amortising risk, excessively large supply chains generate too many hidden/unknown risks and are impossible to effectively manage. A far better position is to have some supplier diversity, but maintain a manageable portfolio, which can be strategically developed for improved performance.
Minimising supply chain complexity is the best way to create a more efficient, more agile organisation, that can respond rapidly to emerging consumer demands and reduce risks in getting products to market in a timely manner while meeting margins.
Chemigraphic has always invested in smart resources and intelligent systems, introducing improved classifications that account for complete trackability and traceability throughout the supply chain.
In addition, by working with our customers and supply chain at both the design stage and throughout the life-cycle of a product, our team ensures we can maximise efficiencies and reduce risks from supplier selection.
Our best-in-class ERP
Our recent introduction of a fully cloud-based ERP system has strengthened our ability to manage design, manufacture and our supply chain.
IFS Applications 10 is a best-in-class ERP – and we are one of the one of the first UK businesses to have had this version of IFS implemented from scratch.
Commenting on the benefits of the new ERP, Stewart Gadd, Technical Director at Chemigraphic, said that ‘our new and enhanced system has improved our operational efficiency by bringing everything together into one core platform. The benefits are clear for our customers: it enables superior planning, better forecasting and enhanced capacity management, allowing us to do what we do better, faster and more flexibly.’
To ensure the new ERP system enables the sales and planning team to work more effectively with each customer, Laura Goring has been appointed as the first Programme Manager, whose role is to liaise with customers so we can better understand their requirements, potential barriers to progress and expectations early on in our relationship.
This allows us to create an improved, clear forecast for each customer and each project, in order to manage capacity and activity peaks as far ahead as possible.
Laura explained that ‘understanding the variables for each customer before inputting information into our own systems provides our customers with considerable benefits and means that we can work more efficiently to their demands.’
Our focus on robust supply chain simplicity
Supply chain complexity cannot be managed by systems planning and early engagement alone.
Our team enables scale, scope and speed through established relationships. We offer a robust supply chain that reduces our customers’ touch-points and removes risk.
We use various sourcing platforms to secure supply, underwrite stock and in some cases carry out last-time buys on your behalf. We fulfil your Bill of Materials (BOMs) using only the safest supply routes, either by purchasing directly from the manufacturer or via our global network of partners who offer full product traceability.
Our supply-chain management team reviews top level products to mitigate obsolescence risks and investigates supply sustainability to ensure partners are resilient and capable of scaling.
Our strong and long-lasting relationship with global supply chain partners ensures you receive:
- 100% transparency and traceability
- Confirmed supplier validation
- Consultancy on terms and conditions
- Contract negotiation support
- A proactive approach to changing market dynamics
Our focus on managing materials
Our efficient management helps you to eliminate waste, reduce material cost and shorten lead-times, while remaining agile enough to respond to changing market forces.
Our ERP offers an inventory management programme that optimises stock holding levels to minimise the costs of excess inventory.
By working with supply chain partners from design to delivery we can reduce costs and minimise obsolescence and availability risks.
How Chemigraphic adds value by simplifying your supply chain
As important as issues such as market research, design, validation, functionality and test regimes are to the success of OEMs’ products, the supply chain – as we have seen – poses significant risks and cost implications. And, in today’s climate of acquisitions and mergers, increasingly so.
The earlier such risks are considered the more effectively they can be minimised.
That’s why Chemigraphic can help you when reviewing your inventory or working on an NPI to reduce risk, delays and cost.
Building an effective supply chain to ensure on-time delivery, cost savings and a reliable flow of components is crucial when preparing any product for a smooth route to market.
The ultimate commercial success of any technology product hinges on having a developed, capable and sustainable supply chain – and we can help you maintain this throughout your product’s lifecycle.