Posted by: Raman Vaidyanathan On June 26, 2020
There has never been a better time!
Why you should Consider Building a Resilient Engineering Supply Chain Management System Now!
The current pandemic and ensuing lockdowns instituted to ‘flatten the curve’ across the globe has resulted in massive supply chain disruption. According to a survey by the Institute of Supply Chain Management, of US manufacturing and non-manufacturing organizations, nearly 75 percent of companies reported supply chain disruptions. The present situation has caused many corporates and enterprises to think about diversifying the supply chain base in order to stay ahead of business continuity risks. However, for this important alternate supply chain ecosystem to be put in place, it has to start with a need to identify, evaluate, audit and certify new suppliers for serial production after following the necessary process. This would necessitate an understanding of the various aspects of the current supply chain so that the alternate supply chain can be at par or better.
The engineering supply chain is a complex mechanism that is responsible for end-to-end delivery from the planning to the operation of supply chain. The digital era has ensured that engineering supply chain management has found its rightful place within the manufacturing industry. Applied to all functions of the supply chain, this process has become even more important given the situation that the world is currently in.
The criticality of an engineering supply chain lies in its function of enabling manufacturing source the right suppliers globally, arrive at competitive pricing, manage authentication, tracking and logistics handling. Moreover, this vital role is amplified with the need of a matured partner having proven expertise, best-in-class processes, templates and intellectual property in the current context of existing and post-COVID world.
However, very often a crisis is also an opportunity to accelerate implementation of technologies, finitely integrate all the stakeholders and drive operational excellence. Manufacturing companies across the globe are re-looking at how best to transform end-to-end supply chain challenges.
At this conjecture, implementation of an end-to-end ERP integrated supply chain solution is the need of the hour. This will simplify things for manufacturers, regardless of the vertical. The solution should meticulously cover each step including,
- Vendor identification and soft benchmarking
- Assessment and Qualification based on pre-set criteria
- Should Costing Exercises that ensure cost efficiencies
- Supplier development
- Continuous improvement
- Quality processes
- Product & Process Planning
All these processes have always been important and in a post-Covid scenario will continue to be vital to business continuity. The requirements though have already begun to change in complexity. To effectively navigate these changes, manufactures need the right partner who is willing to move from the role of a mere technology provider to an end-to-end solutions provider—with deep experience and understanding of market, product engineering, manufacturing, operations, supply base and technology, facilitating everything from planning to delivery and all the finite steps in between.
Focus on Technology Built on a Foundation of Manufacturing Experiences!
Recently, one of our existing customers, a European locomotive manufacturer, needed to shift base from a region impacted by an ongoing lockdown to India—therefore needing support in identifying, assessing, certifying and bringing on board local suppliers capable of handling the requirements. The customer also faced challenges like legal and export-import compliance, since country to country, and region to region obligations differ.
Tech Mahindra stepped in and used its expertise and experience to swiftly resolve the customer’s problem of shifting base from one country to another in the present strained circumstances. Apart from solving the customer’s supply chain issues, the solution resulted in the customer benefitting from a cost reduction of 25% by industrializing with a local Indian supplier and a 30-day reduction in average logistics time. Most importantly, it helped in de-risking by providing alternative sourcing in India.
The advantage of working with a partner like Tech Mahindra in this scenario is the value it brings with over 25 years of Engineering and manufacturing expertise, in addition to its global presence. Another example involves the shifting of 4000 components from US to South Korea for an Aerospace company from a last article inspection (LAI) perspective. Here too, Tech Mahindra was able to apply its expertise to successfully comply with the customer’s needs.
Such scenarios as illustrated in the above examples are going to play out more often in the immediate future, but with the right technology and experience, it is possible to ensure business continuity irrespective of outside circumstances.
Sustaining your Manufacturing Supply Chain in a Post-Covid world
In a global scenario where expertise, costs, materials, etc., are important considerations, relying on suppliers from various countries will continue. As the COVID-19 crisis has taught us it is integral to spread the risk so that there is always a backup or alternatives. Risk mitigation will play a vital role in the supply chain of the future.
Companies and manufacturers will need to plan for digital operations to leverage the emerging digital supply chain and supply chain analytics to predict future risks and plan for better demand. They will also have to ensure that security and regulatory compliance, claims/losses management, alternate sourcing and supplier diversification is in place to ensure business continuity.
To build alternate supplier or diversification in the E2E supply chain the following vital factors need to be addressed
- Validation of the financial strength of the organization during supplier evaluation
- Identification and evaluation if the supplier is able to operate at required levels as part of the mapping process
- Addressing the contract requirements and logistics for short and long-term requirements
- Evaluating eco system availability and robustness levels to address the requirements
- Understanding the tax implications based on the location of the supplier
- Appraisal of commercials and payment terms
- Assessment of the ability to support digital transformation requirements
- Review of regulatory compliance with respect to location of the manufacturing plant and security considerations
The Right Partners and Long Term Collaborations!
Companies like Tech Mahindra have been serving customers with technological solutions that make the whole process seamless, transparent and scalable. iSCAN is a great example of digital adoption to help solve customer problems with visibility on overall operations and results. iSCAN helps collaborate, assess, digitize and manage supply chain data for operational efficiency and risk management through automation and analytics. Actionable insights from a customer’s supply chain data give customers the competitive edge needed, which in turn influence business outcomes.
Leveraging iSCAN equips Tech Mahindra to serve as an ideal partner to manufacturing companies looking for supplier diversification. By blending the foundational manufacturing and vendor development knowledge with next gen technologies Tech Mahindra makes use of the iSCAN application to ensure that the whole process is seamless, transparent and scalable. Pre-configured templates that allow for the capture of information across parameters; the planning to get access to more suppliers through self-registration; continuous assessment with an eye on quality and pricing and real-time data insights to track and monitor supplier performance—these are just some ways in which Tech Mahindra strives to be the ideal partner for manufacturing companies seeking to streamline their engineering supply chain.
To conclude, Tech Mahindra is here to Engineer your next Journey!
About The Author
Raman Vaidyanathan is the CTO for Digital Strategic Solutions, IOT & Engineering at Tech Mahindra. He has industry experience of 30+ years and He has served Engineering companies like Alstom Transport, Siemens and serving Engineering services and solution providers like Tech Mahindra.
He started his career as an R&D engineer, moved on to specialize in development of SIL3 and SIL4 safety critical controls, and embedded software in the Rail, Aerospace, Automotive and Industrial verticals. He also led the development and successful installation of the first dual processor fail-safe solid-state interlocking system for Indian Railways. He has led Tech Mahindra’s Digital Engineering initiatives with distinction and success, building it from a few pilot projects to a compelling portfolio of solutions.