Supplier management with PLM-early visibility key to optimising sourcing strategies

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By Chuck Cimalore, CTO and President, Omnify Software.

It's no surprise that supply chains are growing in complexity as manufacturers continue to globalise in order to reduce costs and expand their market. With this shift, manufacturers need to take a new approach to managing their supply chains by finding ways to improve communication with suppliers, obtain early visibility into sourcing information and better mitigate supplier risk.

Typically supplier information is managed in a Supply Chain Management (SCM) or Enterprise Resource Management (ERP) system where information is maintained for products that are in production or even in a prototype phase. Information at this phase of a product's lifecycle allows manufacturers to determine production costs, delivery dates, and analyse supplier performance. However, many manufacturers are now implementing ways to gather and analyse information earlier in the product's lifecycle, during the planning and design/development phases. Taking action at this point allows manufacturers to view potential delivery and cost issues, avoid poor product design decisions, and reduce development time. This is where Product Lifecycle Management (PLM) comes in.

PLM Provides Early Visibility

PLM technology, at its core, provides a centralized environment to manage all product associated information. PLM takes a comprehensive approach to managing design and development data including; Bill of Materials (BOMs), engineering changes, documents, Approved Manufacturers Lists (AMLs) and Approved Vendor Lists (AVLs), quality, training requirements and projects.

PLM systems manage product information from its conceptual phase through its obsolescence phase.  New product ideas and redesigns as well as new component/part requests originate in the PLM system.  PLM systems also provide a platform to exchange data with various systems, such as ERP and SCM.  PLM systems provide a holistic view of the product record and enable secure access to all members of the enterprise as well as the "extended enterprise" (suppliers, partners, contractors, etc.). PLM systems leverage workflow processes that allow new products, parts, and changes to be introduced and allow the appropriate personnel to provide input (approval, disapproval, and other suggestions) before these items can move to the next stage of their lifecycle. Having supply chain personnel involved early in the development phases of a product allows manufacturers to perform cost, availability, delivery, and feasibility analyses to determine the viability of a product or project.

Early visibility also allows manufacturers to begin the relationship and contractual development process with new suppliers/vendors while the product is being developed without having to wait until production is ready.  In addition, using PLM permits procurement groups to update product record data such as costs, lead times, vendor/part statuses, and past supplier performance, thus helping engineering to make better design decisions and reducing redesign costs.

Mitigate Supplier Risk-Supplier Quality Management

Manufacturers must constantly evaluate their Supply Chains for quality and compliance. Supplier audits are a common way to ensure that a supplier is following proper processes and procedures and to reduce supplier compliance risk.

Many regulatory agencies and bodies such as ISO (International Organization for Standardization) and FDA (Food and Drug Administration) as well as good practice (GxP) standards require a well-documented method of ensuring that manufacturers are performing audits of their suppliers. These audits need to be performed on a consistent basis to guarantee their product quality standards are maintained. PLM systems are built on scheduling engines which enable manufactures to define audit cycles for any given supplier. These automated audit cycles not only remind manufacturers when critical supplier audits are necessary, they also present a structured process necessary for the manufacturers to pass their own internal and external audits.

PLM software also provides a closed-loop, Quality Management system that allows manufacturers to capture all issues and relate them directly to the product records.  Capturing issues and associating them to the product records equips manufacturers with the ability to aggregate data from multiple product lines and across all suppliers to produce reports for non-conformance and better isolate problems in the supply chain.  Engineers typically only have visibility into supplier names and part numbers. However, with this enhanced supplier data within PLM, engineers are presented with a complete view of suppliers which includes history, past performance, audits, and current supplier status. This data again helps engineers to make better design choices.

An Integrated Solution

As stated earlier, many manufacturers manage supplier data in various systems (PLM, SCM, ERP, MES, etc.).  Regardless of which system "owns" the data, PLM systems provide a single platform for presenting the data.  PLM can push and pull data from these various systems in real-time.  Since PLM systems provide the backbone for managing data during design/development phases, design engineers can access this data directly from the PLM system and do not need to access these other systems.  Many PLM systems can be directly integrated into the engineering tools (CAD and CAE systems).  Thus, design engineers can access the data and reports from within their design environments. Using this approach allows organizations to leverage existing investments and processes while providing best-in-class applications for the employees.

The Social Approach

While we have outlined the key benefits of having supplier data available during the design phases, it is critical to note that this data must be up to date. Stale supplier data such as costs, availability, and lead times can be just as harmful as having no data.  Therefore organizations must deploy solutions that ensure accurate supplier data across the entire enterprise that is synchronized and current. We use social media every day as a channel to interact with people within a virtual community.  Supplier management, by definition, means that we need constant interaction with those people and organizations that help us deliver products to market. Leveraging social media concepts and technology for supplier management provides a means to automate and streamline communication and data sharing with suppliers. PLM and other enterprise systems are now embedding social media technology into their framework.

This approach means that suppliers can provide the latest product information in a secure environment without having to use or access the manufacturers' systems directly.  Manufacturers can also deliver reports, audit results, status updates, and performance metrics to their suppliers directly within this framework. Employing these techniques means that manufacturers and their suppliers can get a real time view of data (rather than using emails and spreadsheets) within a controlled and secure community.


With the growing emphasis that manufacturers are placing on analysing supplier performance and reducing costs and risks, leveraging PLM systems to drive this analysis earlier in a product's lifecycle is a key component to ensuring the success of a product. and sometimes the company itself.

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