4 step methodology to supply chain success
It’s a timely reminder that no matter how efficient your supply chain is, we’re all at the mercy of the next calamity. Building redundancy into your supply chain is critical, but even then you need to make sure that your supply routes are spread not only across multiple vendors, but also multiple geographies and ideally multiple shipping routes.
When NetSuite went about re-thinking its supply chain software, all of the processes were mapped out and it ended up grouping them into four categories: Design, Plan, Execute & Support. These categories really helped focus the customers where spoken with as we held our process mapping sessions, but they should also be useful when evaluating the effectiveness of your supply chain redundancy.
Everything benefits from having a solid foundation to build on, and your supply chain is no different. True redundancy will inevitably result in multiple variations of your product designs, especially if you’re relying on your contract manufacturers to source local components. In NetSuite, the Advanced BOM feature allows for a specific version of a BOM to be applied to any combination of locations that it’s sourced from – but uniquely, it also allows a single BOM to be associated to multiple end SKUs. This really simplifies things when your dealing with multiple brands of a single item. Making sure that everyone is working from the same version of the BOM at all times reduces errors, ensures optimal cost of quality and should also minimize returns. Having your Engineering Change Order process embedded in your ERP system – unifying design, engineering and execution – should be a critical part of your company’s strategy.
Building on a well designed product and supply chain, it’s time to plan for the inevitable! Whether natural or otherwise, Murphy’s Law states its going to happen, so you must be ready for it when it does. One of the keys to effective supply chain management is a control tower, essentially a single place where you can go to see everything that’s happening, evaluate your response and execute upon it. NetSuite has launched a supply chain snapshot feature that’s a central part of any control tower that shows all of your inventory and related transactions with the ability to filter by subsidiary, location etc. Users can easily now look at your global or regional supply situation and quickly source alternates when required, but the key here is to practice your response. Using a sandbox account to plan out some simple and worst-case scenarios and discussing the best ways to resolve them and how those should be communicated internally and externally will make it easier to execute an alternate plan when it’s required.
Communication is a key aspect in all areas of business, but especially so in a complex supply chain. Keeping open lines of communication and making sure that the message being delivered is concise and specific is critical. Consider establishing a communication strategy for suppliers, customers and employees. In today’s social media age, people have more information at their fingertips than they can possibly consume – so it’s your responsibility to guide them to the information that’s most important and to make sure that everyone knows what you expect of them. It is your supply chain after all. Not all your suppliers will be fully digitized, but they can still take advantage of using NetSuite’s portals to make sure they are always aware of your current plan and how you expect them to execute against it.
Support is an interesting category. At the end of the day we ended up putting everything that supported but didn’t directly impact the supply chain into this category. Beyond after-sales support, customer service and financials, one of the biggest areas of concern was fully understanding the cost of sourcing products from other geographies. NetSuite’s Inbound Shipment Management and Landed Cost functionality ensures that you can consider freight, duty and brokerage costs – and the impact on profitability – as part of your decision making.
With NetSuite’s 18.2 release, your supply chain managers have unprecedented access to all the information they need to make the decisions that ultimately affect your business’ ability to execute on your plan. Whether that involves design and engineering changes, full documentation control, real-time tracking of current and future inventory balances, inbound shipment management or accurate accounting of landed costs, they will find all of the necessary information at the tip of their fingers allowing them to execute on their plans and fulfill your company’s goals.
But to really make fundamental change to your business, you’d be wise to consider following our four step methodology to supply chain success: Design, Plan, Execute & Support.
Author Gavin Davidson, NetSuite Product Marketing Manager voor ERP
More information about NetSuite version 18.2? Call: +31 (0)33 2471599