Supply Chain Optimization

supply-chain-optimizationMany companies in the manufacturing sector are presented with supply chain issues every day ranging from identification of new suppliers and materials through manufacturing transportation and distribution to customers. It is not uncommon for both complex, multi-national original equipment manufacturers (OEMs) and small or mid-sized manufacturers in the U.S. to be faced with challenges. From reducing risk and volatility to identifying and collaborating with suppliers through understanding the true total cost of the supply chain, the situation must be assessed and a strategic solution implemented. Also, visit the MEP supply chain website at www.MEPsupplychain.org

 

 

Value System: An interconnected system of Supply Chains and Value Chains beginning with the determination of Customer needs and extending through all supplier and distribution channels required to provide the good or service to the Customer.

Supply Chain: All enterprises, from sourcing of all materials, through production and distribution, required to provide goods and services to the customer

Value Chain: The value-added activities and business processes within each organization in a supply chain  required to provide goods and services to the customer

value chain

Companies should begin by understanding and defining their supply chain strategy and aligning it with their corporate strategy. Due to ever increasing volatility in the global manufacturing environment, companies can no longer rely on a strategy of lowest price, shortest lead time and acceptable quality. Today, high performing supply chains are collaborative through their multiple tiers. They quickly identify and mitigate volatility and have the capability to develop, manufacture and distribute new or improved products more rapidly than ever before.

The NIST Manufacturing Extension Partnership (MEP) program conducted research to identify the critical needs of supply chains. Through a two-phased Voice of the Customer survey, 12 competitiveness drivers were identified. A Voice of the Customer white paper is available for additional details.

Top 12 Competitiveness Drivers

  1. Identify and address choke points in a sustainable manner
  2. Increase effectiveness of ERP/MRP
  3. Mitigate global risk
  4. Document supply chain strategy
  5. Reduce/manage volatility
  6. Align supply chain metrics with long-term business focus
  7. Optimization of supply chain
  8. Recognize emergent needs for future capabilities and technology
  9. Expand supplier matching capabilities to source for emergent needs
  10. Better Total Cost of Ownership decisions
  11. Enhance value chain collaboration among suppliers, OEMs and customers
  12. Improve OEM/Supplier product development collaboration

From this research, the MEP team uncovered recurring themes: companies are suffering from a lack of collaboration and visibility in their supply chains, especially in the tiers furthest from the customer, the true total cost of ownership is not understood and there is no synchronized plan for the entire supply chain.

These are all factors that should be addressed by leadership; agreement that change should be made within the supply chain and the ability to identify areas of improvement will be necessary as you dive deeper.

The MEP program is uniquely positioned to assist manufacturers in each of these 12 areas. Under the Supply Chain Optimization Initiative, MEP centers are able to focus on the critical areas of the supply chain at both the prime and supplier tiers. Based on a Theory of Constraints methodology, MEP centers improve supply chain performance by quantifying the needs of the supply chain and focusing on improving the points in the process which are impeding the throughout of the entire supply chain.

MEP centers throughout the U.S. have the capability to provide a customized and collaborative solution to an organization’s supply chain improvement needs in a consistent approach in every state. The centers are able to effect change at all levels of a supply chain, from the OEM/prime through all tiers and value chains. We have the ability to identify constraints in your supply chain and utilize local assistance for planning, training, and implementation. Experts in manufacturing can assist your company with:

  • Change Management
  • Lean Manufacturing
  • Theory of Constraints
  • Demand Planning
  • Product Development
  • Six Sigma
  • Quality Management Systems
  • Strategic Energy Management
  • Sourcing & Logistics
  • Risk Identification/Mitigation
  • Total Cost of Ownership
  • Collaborative Product Development

MEP Supply Chain Optimization services offers companies a unique way of quickly focusing on the critical area of the supply chain with an approach that is strategic and constraints-based. This approach focuses on the entire supply chain rather than individual suppliers and is intended to improve the speed of delivery of the supply chain, improve collaboration, reduce risk, and decrease overall total cost. Companies that excel with this optimization can expect to be better positioned to develop, source, manufacture, and distribute superior products at lower total costs; increase revenue, profit, and shareholder value faster than competitors; more effectively anticipate required future capabilities; and better qualify suppliers to meet these needs.

The MEP path to Supply Chain Optimization begins with the development or refinement of a Supply Chain Strategy, a guiding compass for optimization activities and provides a measure for the maturity of an organizations’ supply chain. The program will assist companies with exploration through two executive workshops, first for the prime and then the suppliers to prime, designed to systematically understand the critical areas controlling the performance of the supply chain and foster collaboration among the supply chain members.

Contact your local MEP center today to begin your supply chain optimization program, or visit www.nist.gov/mep for more information about the supply chain initiative.

“The two day workshop is jam packed with theory, class exercises, real life examples and interactive discussion. Our entire team was involved and challenged, and we came away with a very workable road map on how to improve our Supply Chain. Overall, the program was well worth our investment.” – John King, North American Food Equipment Director, Sealed Air Corporation

“MEP has put together an intelligent program that was well thought out and challenging for supply chain management team. They challenged our supply chain approach and current paradigm—forcing us to take a fresh look at what we do and how we do it. We are using the supply chain strategy tools that they provided as “take-aways” to change how we do things.” – Bruce Broxterman, President, Richards Industries

“MEP has based the workshop on the “Theory of Constraints” approach. Due to the fact that we have some talented LEAN guys on our team, it resulted in very in depth discussions. We now look at known topics from a different angle. The teams have already started to implement the new knowledge and ideas into our existing programs. The two day workshop has helped to recalibrate the way we think and act.” – Joerg Klisch, VP Operations, Tognum North America

“The company is now able to maintain disciplined inventory control and institute management changes quicker. We use the Theory of Constraints to control demand indicators, allowing us to optimize the utilization of assets and manage the entire system much more efficiently.” – Bart Burford, Operations Manager, Syn Strand, Inc., Voith Group

“Sonoco has used several different models to develop supply chain strategy in the past with varying degrees of alignment across the various functions of the value stream. The SCMEP facilitated process in 1.5 days gave us the most aligned vision for supply chain excellence that we have ever developed. The process also gave us a roughed out action plan for the 3-5 bold steps that were identified that gave us a way to implement the vision as we move forward. The combination of education with Dr. Gray and Process facilitation by Chuck Spangler was very effective.” – Keith J. Holliday, Director – Supply Chain & Logistics Sonoco Products Company

“MEP has developed an interactive workshop focusing on the “Theory of Constraints” approach for supply chain management. With a very talented group of lean professionals on our team we had in-depth discussions and learned to look at the continuous improvement topics from a different perspective. Our team has already begun implementing new knowledge into existing programs; the two day workshop has already helped recalibrate the way we think and act.” – Joerg Klisch, VP Operations – North America Tognum America

“MEP has put together an intelligent program that was well thought out and challenging for supply chain management team. They challenged our supply chain approach and current paradigm – forcing us to take a fresh look at what we do and how we do it. We are using the supply chain strategy tools that they provided as “take-aways” to change how we do things.” – Bruce Broxterman, President Richards Industries

Executive Workshop

Purpose

To investigate, in a workshop setting, the components of a Synchronized Demand Driven Value Network, the importance of good strategy and execution within your supply chain, and the tradeoffs required in making decisions about your supply/value chain.

Objectives of the Program

  • Provide Executives with a mechanism to better understand the cause and effect decisions within the Supply Chain.
  • Provide a method to understand the critical (key) areas controlling the performance of Supply Chain, and foster collaboration among the Supply Chain Alliance members (Tier 1, and beyond).

This series of educational workshops focus on the critical components required to create and implement supply chain plans that will deliver higher value to organizations (it is all about developing a plan of profitability/satisfaction). The first executive workshop is comprised of the following key educational items:

  • Where are you in your supply chain maturity?
  • Supply Chain Fundamentals
  • A brief introduction to Constraint Theory
  • A three round Executive education supply chain game
  • Strategic Implications for your Supply Chain
  • Develop a supply chain strategy or key initiatives to improve Supply Chain performance
  • Identify suppliers and supply chain alliance members (for a particular product line) to attend the second executive workshop. The product/product line should be one that is causing poor performance for the firm.

The company will leave the first two day workshop with 3 to 5 Bold Steps to move the Supply Chain forward and an action plan (Game plan) for each Bold Step.

Supply Chain Executive Supplier Workshop

The second executive workshop is for the suppliers identified in the first executive workshop by the OEM executives. The goal for this supplier workshop is to improve the supply chain results and performance by developing a collaborative plan. This plan is to be synchronized with the supply chain Host/Captain’s strategic supply chain plan and must include appropriate implementation/execution action plans. This workshop identifies the weakest link in the product line supply chain.

The second executive workshop is comprised of the following key educational items:

  • Where are you in your supply chain maturity?
  • Supply Chain Fundamentals
  • A brief introduction to Constraint Theory
  • A three round Executive education supply chain game
  • Explain OEM/Host supply chain strategy
  • Understand their role in the overall value chain and the impact/interaction that we have on other members of the supply chain
  • Develop strategies and executive tactics to address performance of suppliers.

Following the second executive workshop, the weakest suppliers and/or processes will have been identified and a plan with the prime, OEM and each supplier will be developed to improve the performance of the supplier and the supply chain.

The supply chain workshops are a part of a larger supply chain initiative developed by a consortium of Manufacturing Extension Partnership (MEP) centers that fall under the National Institute of Standards and Technologies (NIST) of the Department of Commerce.  Dr. Van Gray of Baylor University and Mr. Chuck Spangler of the South Carolina MEP have been the primary developers of this portion of the workshops and have presented the workshops to both large and small companies in various industries. The workshops are a two-day event.

Click here to download agenda.

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