supply chain collaboration

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MANUFACTURING

KNOW HOW

Guide 3

How to improve

supply chain collaboration

4 STEPS TO

IMPROVE

your business

CRITICAL

QUESTIONS

to ask yourself

LEARN FROM

best in class

manufacturers

FIND OUT

how Microsoft Dynamics

can help

Oil the wheels of your business!

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Eff ectively dealing with Supply Chain Complexity may well prove to be one of the most important challenges facing Discrete Manufacturing companies over the coming years. The industry is increasingly becoming a complex and global industry where discrete manufacturers can no longer operate the same way they have in the past and remain successful. New products are incredibly complex, engineering is now a globally distributed and collaborative process, manufacturers as well as suppliers are also globally distributed, and consumer growth is almost entirely located in emerging economies. For discrete manufacturers to succeed in this environment, it is essential they orchestrate an integrated network of suppliers and customers. A company that is in control of a ﬂ exible and adaptable supply chain is better positioned to react when the market changes and deliver innovative, high quality products to customers.

This guide to discrete manufacturing is designed to be a quick yet eff ective reference for executives to understand and deal with supply chain complexity in four easily implementable steps. Each step will give a high level overview of the concept, support the concept with proof points from industry analyst research as well as from real manufacturers’ experiences, and end with a discussion of how Columbus technology and services can play a supporting role.

Finally, we hope this guide is only a fi rst step in your journey towards eff ectively managing a ﬂ exible and adaptable supplier network and we look forward to the opportunity to be a trusted resource and partner.

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RESPONSIVENESS

Introducing RapidValue, a business process modelling solution that is fully integrated with

leading ERP solution, Microsoft Dynamics AX.

It enables manufacturers to meet up to 80% of their business requirements right out of the box. ColumbusManufacturing has mapped best practice manufacturing processes and built them into Microsoft Dynamics AX to help organizations realize the full potential of the solution and gain a quicker return on investment.

How Does RapidValue help you improve Supply Chain Collaboration

• Best practices built in from the start

• Tools to streamline business processes

• Ability to leverage world-class performance metrics and benchmarking with SCOR mapping

• Flexibility to adapt business models to suit changing situations

• Business processes and applications fully aligned giving supply chain visibility

• Oﬀ -the-shelf integration templates to leading CAD and PLM systems giving faster new product introduction and better controlled product change

RapidValue gives you best practice processes and procedures with the ability to respond to fast changing business needs

4 STEPS TO IMPROVE SUPPLY CHAIN COLLABORATION

Step 1:

Get all supply chain stakeholders on the same page by putting in place a formal Sales and Operations Planning (S&OP) initiative

Step 2:

Implement multi-echelon supply chain optimization tools to improve coordination and ﬂ ow of materials across multiple tiers of suppliers

Step 3:

Reduce supply chain risk and stay in compliance with integrated traceability

Step 4:

Extend quality management to the supply chain

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1:

Get all supply chain stakeholders on the same

page by putting in place a formal Sales and

Operations Planning (S&OP) initiative

The first way discrete manufacturers should attempt to address complexity in the supply chain is by focusing internally and making sure all the different stakeholders in the supply chain have a common understanding of the goals. One of the main ways discrete manufacturers have been creating this common understanding of the supply chain and eliminating silos in the organization is through initiatives like Sales and Operations Planning (S&OP) or Integrated Business Planning (IBP).

To ensure the success of S&OP or IBP planning

initiatives, discrete manufacturers should first focus on bringing together different departments like finance, supply chain, manufacturing, engineering, procurement, sales, and marketing to create a formal collaborative management process. Many times these different groups and stakeholders will have their own agendas so creating a collaborative environment with shared goals and a trusted financial planning and budgeting capability can help align these groups and make communicating in a common language much easier.

Furthermore, to make an S&OP or IBP initiative truly successful, it should go straight to the highest levels of the organization and be supported at the executive level, hopefully by the CEO. These initiatives should also have an agreed upon set of shared metrics that measure success over time. Innovative discrete manufacturers are also starting to tie compensation to these shared metrics through management by objective type

initiatives. Finally, as we will see in the next section, it is important to support these initiatives with collaboration and visibility tools.

QUICK START:

To quick start performance in Sales and Operations Planning, leading discrete manufacturers are taking the following actions:

• Establish executive support for S&OP initiatives

• Set clear goals for the supply chain and make sure all stakeholders understand their role in achieving these goals

• Put in place formal collaboration processes for S&OP to sustain momentum over time

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Questions to Answer:

> Does procurement and the supply chain have a common understanding of preferred vendors and high performing suppliers?

Sales and Marketing

To assist in the planning of materials and capacity some business scenarios can deliver signifi cant reductions in lead time to the customer by planning against a demand forecast. Tools are available within Dynamics AX that can assist in generating forecasts from sales history, using statistical algorithms to arrive at a suggested forecast. The suggested forecast can then be passed around a collaboration group of people for adding the additional human intelligence that might be necessary.

Business Planning

Having a comprehensive, easy-to-use and (most importantly) eff ective suite of planning tools can signifi cantly improve the operational performance of a business. Buyers and procurement planners need clear and concise visibility of “what is required, when it is required and why it is required”, and equally they need to know the consequences of failure. At the same time the supply of raw materials needs to be balanced and synchronized with the capacity of the business’ manufacturing resources (including sub-contractors). Production planners need a ﬂ exible and a highly graphical representation of the production schedule that allows the inevitable fi ne tuning to be completed with the minimal amount of fuss and eff ort.

Microsoft Dynamics in the spotlight:

Best-in-Class discrete manufacturers are more than 25% as likely as Laggard organizations to collaborate between manufacturing, the supply chain, and IT on the deployment of software systems.

According to a recent Aberdeen Group Benchmark Research Project sponsored by Columbus

Pumps manufactured by MetPro, a Columbus customer Manufactured by Hi-Tech Mold

and Engineering S.E. Inc., a Columbus customer

Heating ducts manufactured by Exheat, a Columbus customer

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Implement multi-echelon supply chain

optimization tools to improve coordination

and ﬂ ow of materials across multiple tiers of

suppliers

2:

A major factor in the increasing complexity of discrete manufacturing supply chains is the increasing

interdependencies between diff erent players in the supply chain. Often a large Original Equipment Manufacturer (OEM) will have 10, 20, or more Tier 1 suppliers. These Tier 1 suppliers are often viewed as partners and may collaborate on engineering, manufacturing, and supply chain operations. Then, for each of these Tier 1 suppliers, there is another set of Tier 2 suppliers that can quickly grow to 100’s or 1,000’s. The interactions of these suppliers in diff erent tiers, (multi-echelon supply chain optimization) now needs to be coordinated both with the Tier 1 supplier and also OEM’s to optimize the performance of the complete network.

With modern ERP systems that come with built-in supply chain optimization and collaboration tools, it is now becoming possible to much more easily model and optimize supply chains. With web-based supplier portals, multi-enterprise data sharing is becoming a reality.

QUICK START:

To quick start performance in Multi-Echelon Supply Chain Optimization, leading discrete manufacturers are taking the following actions:

• Build a model of the supply chain that goes beyond just direct suppliers and customers. Consider suppliers’ suppliers and customers’ customers

• Establish lines of communication and collaboration with multiple tiers in the supply chain

• Create relationships with suppliers that align incentives and smooth inventory ﬂ ow across the entire network

Industrial robots manufactured by Kuka Systems, a Columbus customer

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?

> Can you easily communicate and collaborate with trading partners if there is a supply chain disruption?

Best-in-Class discrete manufacturers are more than 25% as likely as Laggard organizations to have visibility into inventory of suppliers’ suppliers.

Supply Chain Collaboration

Technology has an important role to play when it comes to improving the ﬂ ow of information between a business and its business partners - customers, suppliers and sub-contractors.

In its simplest and most traditional form this is the

transmission of documents (sales orders, invoices, purchase orders, etc.) in a batch fi le format, usually involving the use of a costly EDI service provision company acting as “middle man” to the process. Today’s technology allows Web Services to be deployed to streamline this process and can often remove the need for EDI service provision companies. Frequently this then permits electronic collaboration with smaller business partners that would have found the cost of traditional EDI to be prohibitive.

Furthermore there is increasing value in providing strategic business partners with a level of access to the information that is held within the business system. The Microsoft Dynamics AX Enterprise Portal makes it easy to provide Role Tailored data and business processes in real time over the Web, enabling the business to drive down costs by decreasing paperwork and providing the right level of information to customers and suppliers. The Enterprise Portal can be used to allow sharing of design processes and documentation with customers. This allows customers to review the status of their account, permitting suppliers to update delivery dates and pricing information, and so on.

Microsoft Dynamics in the spotlight:

COLLABORATION BETWEEN DEPARTMENTS We are focused on improving visibility and collaboration between sales, distribution, and manufacturing sites distributed over seven diff erent countries to help reduce and ensure we hit quoted lead times to customers.

Quote from a Columbus Customer

Controller manufactured by Sevcon, a Columbus customer

Manufacturing equipment from Wheelabrator Group, a Columbus customer

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Reduce supply chain risk and stay in compliance

with integrated traceability

3:

Traceability has become a pressing compliance issue in many of the discrete manufacturing industries over the past several years, including aerospace and defense, automotive, electronics, and medical device industries. Discrete manufacturers can no longer survive with summary level traceability data and disparate manual systems for managing traceability. Information travels quickly among consumers and it is important to be able to limit the impact and scope of a recall with certainty. To address these issues, leading discrete manufacturers today have moved to capture more shop ﬂ oor

information to eliminate gaps in data and the need for large wide scale recalls. Unfortunately, data is often distributed across many paper based systems which makes traceability cumbersome and slow. To address these gaps and eliminate the cost and maintainability issues with multiple systems, discrete manufacturers have moved to rely on a single ERP solution as an enterprise-wide system of record for traceability data. This means ERP systems now collect key pieces of data from across the value chain, including: design, procurement, manufacturing, distribution, and customer service data.

By using automated systems to collect and connect traceability data into a centralized system, leading discrete manufacturing companies are able to better manage actual as well as mock recalls but the benefi ts don’t stop there. Many discrete manufacturers that have implemented robust traceability solutions also report dramatic gains in supply chain visibility as well as eﬃ ciency. In fact there is a lot of industry research showing that there is a close relationship between discrete manufacturers being able to manage compliance as well as operational eﬃ ciency.

QUICK START:

To quick start performance in Traceability, leading discrete manufacturers are taking the following actions:

• Automatically collect traceability data from across the enterprise

• Integrate collected data with ERP and use ERP as system of record

• Conduct mock recalls to test capabilities of traceability system prior to actual adverse events

• Build on traceability initiatives to improve overall supply chain visibility and performance

Rail manufacturing by Progress Rail, a Columbus customer

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Watch manufactured by Georg Jensen, a Columbus customer

?

> Is your plant more of a black box than an integrated node on the supply chain?

> Can you easily narrow the scope of a recall if the need arises?

Traceability

Being able to trace raw materials from cradle to grave and vice-versa is critical for businesses. Not only does the identity of a batch of material need to be recorded but so do its properties - such as potency, temperature and other physical attributes.

Microsoft Dynamics AX features full batch traceability throughout the procurement, storage, production and distribution process. Any movement of stock must record batch information, where applicable. A tree-structure view of stock movements allows the user to explore all transactions of a batch up and down the supply chain. This means that if a quality issue is identifi ed for a batch of material or a batch of fi nished product the business is able to immediately identify the source and where else it has been used and can take the appropriate remedial actions.

Inventory Management

The introduction of batch number recording can create signifi cant burdens on the operational aspects of the business. Methods that allow a business to ease this burden include bar code labeling of batches of material, with these bar codes then being read during inventory movement. Batches can also be automatically assigned to customers based on the attributes of the batch (expiry dates, potency, etc.) and the requirements of the customer.

Microsoft Dynamics in the spotlight:

PROVIDE VISIBILITY TO THE SUPPLY CHAIN We reduce supply chain complexity by

consolidating systems, standardizing processes, and providing as much visibility to decision makers as possible.

Torsten Lytken,

Infrastructure Systems Director, Thorlabs, Inc.

Fluid Handling Systems manufacturing by Aliaxis, a Columbus Customer

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Extend quality management to the supply chain

4:

As supply chains have become more complex, supply chain risk has also increased. In today’s global environment, a supplier quality issue quickly becomes an issue for the whole supply network. Many discrete manufacturers are trying to deal with this through more formal quality management initiatives that also include the supply chain.

Most discrete manufacturing companies today still manage quality with a paper based system or a home grown set of disparate applications including spreadsheets, data bases, emails, documents, and more. By moving to an automated quality management system that is part of a broader ERP system, discrete manufacturers are able to eliminate these disparate stand-alone quality systems and move to a centralized system with harmonized quality processes across the organization. Specifi cally, discrete manufacturers are moving to centrally manage traditional quality activities like: non-conformances, root cause analysis, corrective and preventive actions, document management, audit management, and more.

Beyond the quality department, leading discrete manufacturers are also moving to improve quality execution by focusing on visibility and statistical process control of both production processes and supplier processes. These tools can help a company reduce variability and risk in processes that allow a company to be more eﬃ cient and adaptable to a quickly changing market place.

QUICK START:

To quick start performance in Quality Management, leading discrete manufacturers are taking the following actions:

• Automate quality management with a centralized system

• Focus on quality activities that reduce and mitigate supply chain risk like supplier quality management, root cause analysis, and compliance

Lighting system manufactured by Urbis Lighting Limited, a Columbus customer

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?

> Do you know what your cost of quality is? > Do you really know how well your suppliers

manage quality?

Best-in-Class discrete manufacturers are more than 75% as likely as Laggard organizations to ﬂ ow quality data throughout all departments of the organization.

Quality Management

Quality is one of the key attributes that sets apart one business and its products from another. But managing quality is an expensive cost to the business and usually requires careful enforcement and audit.

The quality management features within Microsoft Dynamics AX allow the quality checkpoints in a business to be defi ned and managed. Quality orders are automatically issued to QA staff and quality measures are recorded for subsequent analysis and certifi cation. Where quality failures do occur they can be managed through a closed loop process incorporating non-conformance reporting, concessions and corrective actions.

Non-Conformance Reporting

Non-conformance reporting is directly from quality

management actions. All non-conformances are recorded with reason codes in order to support root cause analysis. Using the in-built alerting and workﬂ ow tools the entire business can be

Microsoft Dynamics in the spotlight:

kept informed and up to date as non-conformances occur and as they progress through the system. As eff orts and expenses are expended in resolving the non-conformance they can be recorded, allowing a cost-of-quality-failure to be established.

Against any non-conformance a corrective action can be raised in an eff ort to prevent the quality failure from occurring again, important where a business is adopting lean continuous improvement practices.

Statistical Process Control and Supplier Visibility

Dynamics AX leverages the power of the SQL Reporting and Analysis Services to deliver a deep insight and understanding of the trends and patterns of quality incidents. The “self service” aspects of the Business Intelligence off ering allows users to create security-enhanced reports using drag-and-drop report authoring, and to display key performance indicators (KPIs) directly in a management dashboard style view (called Role Centres).

Furniture manufactured by Orangebox, a Columbus Customer Printing solutions manufactured by Mueller Martini,

a Columbus customer

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DON’T MISS OUR

OTHER GUIDES

Guide 1:

“How to improve operational efficiency”

Guide 2:

“How to improve revenue growth”

Guide 4:

“How to improve quality control &

industry compliance”

Columbus is widely recognized as a global leader in maximizing efficiency and business performance for manufacturing and distribution companies. With deep industry expertise we know how to make our clients more successful by adapting and implementing proven Microsoft-based solution sets for immediate business impact.

ABOUT COLUMBUS

Columbus has a deep engagement in the manufacturing industry; we build targeted solution sets on top of the reliable Microsoft platform. Our solutions often meet 80% of the industry requirements right off, and with basic system configuration, you will experience the full impact on your business performance with a lower total cost of ownership.

To-Increase, a global ISV and division of Columbus, has been developing high quality software solutions for Manufacturing since 1999. Today, they offer an extensive library of customized modules and

industry-specific solutions to reduce implementation time and cost, and improve business operations. Customers from all over the world tap into this vast library of software modules to improve performance and shareholder value.

The full Columbus solution includes best practice process modelling with RapidValue, the leading ERP solution with Microsoft Dynamics AX, specifically built manufacturing modules from our To-Increase software division and SureStep+, a proven implementation methodology. Business Process Modeling RapidValue ERP Solutions Microsoft Dynamics Implementation Methodology SureStep+ Industry Solutions To-Increase Business Integration Solutions To-Increase COLUMBUS KNOW HOW

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