3 Technologies to Help Manufacturers Manage Dynamic Supply Chains

You can’t always get what you want, especially if you’re an industrial manufacturer. Your order books may be full, but lack of crucial inventory means your supplier can’t deliver to you, and you can’t deliver to your customers.

Firms are struggling to keep up

Customers await arrival of their aircraft as aircraft manufacturers await delivery of the engines needed to fly the planes. The Financial Times quoted Tufan Erginbilgic, CEO of Britain’s Rolls-Royce, as saying the aerospace industry was navigating “one of the worst supply chain environments it has ever experienced.”

Car makers are considering vertical integration, such as making electric motors in their own factories, to keep supplies close at hand in case of geopolitical instability. And everyone’s worried about the supply chain for semiconductors, the tiny brains behind the technologies that run the world.

Not even the upcoming holidays offer any respite. The problems in the Red Sea have forced container ships to sail longer but more secure routes to reach ports. American businesses are rushing - and paying higher prices - to lock in earlier deliveries to ensure cash-heavy consumers have access to holiday gifts. In 2024, peak shipping season took place in April and May. 

The dangers of single sourcing

It’s risky to rely on single suppliers in case of disruption, but you may be doing that without realizing it.  

Kathy Wengel, Johnson & Johnson’s Chief Global Supply Chain Officer, noted that it can be easy to think you’ve diversified your supplier base – only to discover the ones you’ve chosen all go back to the same mill or location. Desirably located suppliers that perform can imperil your operation through unethical practices. In March 2024, the EU passed a law that will make approximately 5,300 businesses responsible for any environmental or human rights abuses their suppliers commit. Good visibility into the supply chain now must include the ability to monitor supplier compliance as well as performance.

Building an inventory buffer?  Businesses that overstock can find themselves with too much product and the unhappy knowledge that every dollar could have been better spent.

Steps to getting what you need

First, check your mindset and accord the supply chain the same importance as any other strategic corporate function. The old view that the supply chain team existed simply to serve manufacturing is gone.

Second, commit to making digital maturity a priority, instead of relying on spreadsheets, idiosyncratic processes, and homegrown methods.  One of your major achievements in optimizing your supply chain may be the transferal of tacit knowledge into systems - before those key employees leave the workforce for the next stage of their lives. One of the keys to optimizing your supply chain is how you make use of your product data.

PTC’s Chief Technology Officer Steve Dertien notes in Supply Chain Takes Center Stage: “Data is being created, stored, and shared across design teams, suppliers, and manufacturing units so that needs are better anticipated, inventory is better managed, and lead times are reduced.”

This is all part of the larger idea of the digital thread, an interconnected flow of relevant data that moves through a company (and beyond) and defines a product throughout its lifecycle. Ultimately, firms can extract value from, or make use of, product data that was inaccessible, underused or hidden. 

CAD, PLM, predictive analytics 

Given the challenges of dynamic supply chains, organizations are looking to digital transformation solutions to build in agility and help reduce risk across the product lifecycle, which includes engineering, manufacturing, and service. Three of these technologies are gamechangers.

CAD

Your firm’s product development solution should allow designers to create, analyze, and simulate a product’s performance before the first prototype. That software should be closely integrated with other tools that allow designers to investigate the part costs, manufacturability, and environmental footprint of different materials and methods. All from the comfort of wherever those team members want to work. 

Product lifecycle management (PLM)

Engineering work moves downstream - or it should.  Or another way to think of it, now that you’ve got product data, is that it should be shared with your suppliers and partners worldwide so that everyone is looking at identical information all the time. With product lifecycle management and the appropriate permissions, your entire supply chain can see what they need to see when they need to do so, as can your own employees. 

A PLM system has everything from the CAD model and Bill of Materials (BOM) to the Process Definition (how the product is manufactured) and the approved vendor list.  As soon as a change to the BOM, the product’s master ingredient list, is made, every stakeholder who has permission to see that data gets the information about the change.

One internationally known manufacturer turned to PLM when they realized that asking skilled engineers to do data entry – from information handwritten on index cards - was a poor use of the company’s resources.

In heavily regulated industries such as A&D, a PLM system can centralize the digital product definition, including regulated technical data. Each link in the supply chain is available, visible, traceable, and able to withstand the scrutiny of the compliance audit.

SIONYX, which works with the U.S. Department of Defense among others, has a mission to provide the world’s most accessible digital night vision technology. After winning the first contract, SIONYX found itself having to meet the stringent compliance requirements. SIONYX’s manual processes wouldn’t do. They chose PTC’s cloud-native solution Arena.  The company now has core product management, document control, and quality processes like corrective action and preventive actions in place.

The Aurora, a color digital night vision camera

Predictive analytics

Any homeowner who goes to fix something and finds she lacks the correct tool has an inkling of what an airline goes through when it doesn’t have the right service part in the right place for one of its planes.  Predictive analytics addresses this type of problem in the service supply chain by putting together machine learning and AI to predict outcomes and answer the most important question: “What should we do?”

One powertool manufacturer had 22 worldwide locations and a collection of over 70,000 unique part numbers with 1.6 million potential part-location combinations. The market expectation was replacement parts delivered in 48 hours.  Unfortunately, the manufacturer’s supply chain was delivering in six months.  With PTC’s Servigistics, the manufacturer optimized its supply chain, reduced ‘dead’ stock by 65%, and greatly improved the availability of parts in the correct location.

Hikoki's tools at work

Conclusion

Getting stuff to where a manufacturer needs it to be is a challenging, and sometimes unpredictable business. Events such as bridge collapses, cyberattacks on shipping, and political incidents are reminders of the supply chain’s physical nature – after all, no amount of code will conjure up a tractor for an impatient customer. Companies can set themselves and their supply chains up for agility and resilience by the strategic application of technology.

The most important piece of advice for any manufacturer?

Begin.