Microsoft Reinvents its Supply Chain by Leveraging SAP Ariba & Intrigo Systems

Microsoft Corp. has one of the most complex supply chains in the world.

And to keep it humming and ensure supply keeps up with demand for its hottest products, the company is reinventing its supply chain.

In a newly released Webcast (watch the video above), the company discusses how it is teaming with SAP Ariba and Intrigo Systems to create a scalable, modern platform to support the efficient, cost-effective manufacturing of its most popular products, including the Xbox and Surface.

“At Microsoft, our mission is to empower every person and organization on the planet to achieve more. And our strategy to achieve this is to build best-in-class systems and platforms and productivity systems,” said Ali Khaki, Principal PM, Supply Chain Engineering, Microsoft.

“When we looked at our supply chain, it was clear we needed to build a flexible, scalable platform that could support the complexity of our hardware business.”

And it is using SAP Ariba solutions for direct spend to do it.

“The Ariba® Network is the backbone for Xbox and Surface line of products supply chain,” Khaki said.

Through the Ariba Network and the cloud-based applications delivered on it – including SAP Ariba Supply Chain Collaboration™, Microsoft has created a modern platform from which it can safely and easily collaborate with multiple tiers of contract manufacturers and suppliers across key supply chain planning and execution processes, including:

  1. Sharing production forecasts, orders, quality, and inventory information.
  2. Anticipating and resolving supply assurance problems.
  3. Onboarding suppliers.

Read more at Microsoft Reinvents its Supply Chain by Leveraging SAP Ariba & Intrigo Systems

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How intelligent automation will impact and revitalise global supply chains

The idea of automation in manufacturing and the supply chain is nothing new – since the earliest days of the industrial revolution we have sought to automate tasks with machines, and lower the cost of manufacturing processes.

In countless cases, the application of machines, and more recently software, has meant improvements in the consistency of products, facilitated near 24/7/365 production and has meant staff can be focused on higher value tasks in their company.

Yet the use of technology in the industry may not be fully understood; a recent Capgemini survey showed that nearly half (48%) of UK office workers are optimistic about the impact automation technologies can have. However, while respondents to the survey had a general idea of the benefits that might accrue, they were less clear as to how these technologies could be applied to their specific area of work. And worryingly, only 20% said they felt their organisations were currently benefiting from automation – clearly the industry is missing a trick.

However, as utilisation stagnates for certain companies, the market is maturing. Automation is now reaching far beyond simple process software and mechanisation. Technologies such as the Internet of Things (IoT), cognitive computing, advanced robotics, Digital Fabrication and blockchain are becoming increasingly popular, bringing together the power of automation and analytics.

Yet other areas such as artificial intelligence (AI) and machine learning, which are proven enablers for new ways of optimizing the supply chain and manufacturing processes, are less understood. It’s agile, forward-thinking businesses that are able to utilise these technologies in a thoughtful way that will reap the benefits.

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Cloud-Based Analytics for Supply Chain and Workforce Performance

Plex Systems, a developer of cloud ERP for manufacturing, has introduced two new analytic applications designed to provide manufacturers insight into supply chain performance and their workforce.
The new Supply Chain and Human Capital analytic applications build on the library of applications in the IntelliPlex Analytic Application Suite, a broad suite of cloud analytics for manufacturing organizations.

The Plex Manufacturing Cloud is designed to connect people, processes, systems and products in manufacturing enterprises. The goal is not only to streamline and automates operations, but also enable greater access to companywide data. The IntelliPlex suite of analytic applications aims to turn that data into configurable, role-based decision support dashboards–with deep drill-down and drill-across capabilities. The IntelliPlex Analytic Application Suite includes analytics for sales, order management, procurement, production and finance professionals.

IntelliPlex Supply Chain Analytic Application
The new IntelliPlex Supply Chain Analytic application provides a dashboard for managing strategic programs, such as enterprise supplier performance, inventory and materials management and customer success. Metrics include:

  1. On-time delivery and return rates by supplier, part, material, etc.
  2. Production backlog by part group, product time, etc.
  3. Spend by supplier and type, including unapproved spend
  4. Inventory turns and aging based on type, location, etc.
  5. Materials management accuracy, adjustments and trends by type, location, etc.
  6. On-time fill rate, customer lead time, average days to ship, fulfillment by location

Read more at Cloud-Based Analytics for Supply Chain and Workforce Performance

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The Analytics Supply Chain

Businesses across many industries spend millions of dollars employing advanced analytics to manage and improve their supply chains. Organizations look to analytics to help with sourcing raw materials more efficiently, improving manufacturing productivity, optimizing inventory, minimizing distribution cost, and other related objectives.

But the results can be less than satisfactory. It often takes too long to source the data, build the models, and deliver the analytics-based solutions to the multitude of decision makers in an organization. Sometimes key steps in the process are omitted completely. In other words, the solution for improving the supply chain, i.e. advanced analytics, suffers from the same problems that it aims to solve. Therefore, reducing inefficiencies in the analytics supply chain should be a critical component of any analytics initiative in order to generate better outcomes. Because one of us (Zahir) spent twenty years optimizing supply chains with analytics at transportation companies, the concept was a naturally appealing one for us to take a closer look at.

More broadly speaking, the concept of the analytics supply chain is applicable outside of its namesake business domain. It is agnostic to business and analytic domains. Advanced analytics for marketing offers, credit decisions, pricing decisions, or a multitude of other areas could benefit from the analytics supply chain metaphor.

Read more at The Analytics Supply Chain

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Big data analytics technology: disruptive and important?

Of all the disruptive technologies we track, big data analytics is the biggest. It’s also among the haziest in terms of what it really means to supply chain. In fact, its importance seems more to reflect the assumed convergence of trends for massively increasing amounts of data and ever faster analytical methods for crunching that data. In other words, the 81percent of all supply chain executives surveyed who say big data analytics is ‘disruptive and important’ are likely just assuming it’s big rather than knowing first-hand.

Does this mean we’re all being fooled? Not at all. In fact, the analogy of eating an elephant is probably fair since there are at least two things we can count on: we can’t swallow it all in one bite, and no matter where we start, we’ll be eating for a long time.

So, dig in!

Getting better at everything

Searching SCM World’s content library for ‘big data analytics’ turns up more than 1,200 citations. The first screen alone includes examples for spend analytics, customer service performance, manufacturing variability, logistics optimisation, consumer demand forecasting and supply chain risk management.

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Monitor Financial Distress in Your Supply Chain

While American manufacturing has experienced a resurgence in recent years, some manufacturers continue to face challenges. Witness for example the recent chapter 11 filings of Colt, Boomerang Tube, and Everyware Global. Sometimes, manufacturers struggle because a supply chain partner—a major supplier or customer—is struggling. In order to manage supply chain contracts, manufacturers need to watch for early signs of financial distress in their customer or supplier base. Then, they may quickly react to red flags and garner an advantageous position.

Trouble in the Supply Chain?

Manufacturers should watch for supplier requests to increase prices or accelerate payment terms. Similarly, cash-strapped customers may ask for financing support. In addition, a manufacturer’s deteriorating market position, failure to effectuate cost reductions, and changes in key management positions all may indicate financial distress. Manufacturers should employ tactics in order to secure continued supply when faced with a financially troubled supplier. By managing contracts after identifying a troubled supplier or customer, manufacturers can often mitigate risks, or even improve their positions.

Manufacturers should prioritize, understand, and address troubled supplier situations with advance awareness. That’s why companies should continually analyze their contracts to maximize leverage, and understand available legal options. To alleviate the pressures of financial distress, manufacturers should exercise common law and statutory remedies in order to purposefully tweak standard terms and conditions of new contracts (or negotiate changes to existing contracts). The terms of these contracts significantly impact the manufacturer’s ability to re-source production to a healthier supplier, recover tooling, and utilize certain remedies.

Read more at Monitor Financial Distress in Your Supply Chain

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China’s supply chain plan could pose threat to Taiwan

A plan laid out by Chinese authorities to cultivate a domestic supply chain for the country’s high-tech manufacturing sector is expected to pose a serious threat to Taiwanese companies, government sources said Saturday.

In voicing the concerns, Ministry of Economic Affairs sources said China’s efforts to help its own high-tech supply chain flourish to lower dependence on imported parts have already reduced China’s trade dependence on Taiwan.

The plan unveiled by Beijing in May to create a manufacturing revolution underpinned by smart technologies over the next 10 years could deal a further blow to Taiwan’s exports, they said.

The latest plan for the mainland to grow its own high-tech sector, called “Made In China 2015,” takes aim at various sectors, including the information technology, and puts a heavy emphasis on the semiconductor segment.

According to figures compiled by the Bureau of Foreign Trade (BOFT), the ratio of China’s imports from Taiwan to total imports fell to 7.76 percent in 2014, from 11.3 percent in 2005.

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Many High-Tech Firms Adopt ‘Right-Shoring’ Supply-Chain Strategy, UPS Survey Finds

Many high-tech companies have adopted a “right-shoring” strategy for their manufacturing supply chains, an approach that balances factors such as cost, quality and transit time, according to UPS Inc.’s fifth-annual Change in the (Supply) Chain survey.

The survey, conducted for UPS by IDC Manufacturing Insights, polled 516 senior supply chain executives in the high-tech industry in North America, Europe, Asia, the Pacific and Latin America.

Offshoring of manufacturing and assembly operations to countries with low labor costs remains the most common strategy, but a growing number of tech firms said they are “near-shoring” — moving production closer to end markets — to improve service levels, reduce inventory in transit and gain more control over product quality.
Among the survey’s respondents, 45% said their companies use right-shoring strategies, 47% said they offshore and 35% said they near-shore. Near-shoring was up 25 percentage points from 2010.

“High-tech companies are building more flexibility into their shoring strategies and supply chains so they can respond better to demanding market dynamics,” said Dave Roegge, high-tech marketing director at UPS. “They’re thinking more holistically about their strategies to evaluate their transportation costs and the time it takes companies to deliver goods.”

Read more at Many High-Tech Firms Adopt ‘Right-Shoring’ Supply-Chain Strategy, UPS Survey Finds

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Top fashion labels save millions from China’s sustainable supply chain

A leading group of Chinese textile mills, which create clothing for major high-volume apparel brands and retailers including Target, Gap, Levi Strauss and H&M, are saving $14.7 million each year by adopting simple efficiency measures in their production processes, according to a new analysis by the US Natural Resources Defense Council (NRDC).

These improvements have dramatically reduced the pollution generated by these mills, cutting up to 36 percent of water use and 22 percent of energy use per mill and a total of at least 400 tons of chemicals.

The 33 mills are part of NRDC’s Clean By Design program, a global model for manufacturing sustainability that is working with major fashion retailers and designers to green the fashion supply chain industry-wide.

“Great fashion can also be green fashion. Although apparel manufacturing is among the largest polluting industries in the world, it doesn’t have to be,” said Linda Greer, Ph.D., NRDC senior scientist and director of Clean By Design. “There are enormous opportunities for the fashion industry to clean up its act while saving money, and Clean By Design offers low-cost, high-impact solutions to do just that.”

Over the past two decades, China has become the epicentre of global manufacturing, and it currently produces more than 50 percent of the world’s fabric, totalling more than 80 billion meters annually.

As a result, the country is suffering from increasingly serious pollution problems while also contributing significant carbon into the atmosphere. Textile manufacturing, particularly the dyeing and finishing of fabric, is incredibly water and energy intensive as the process swallows up to 250 tons of water for every 10,000 meters of fabric produced and consumes 110 million tons of coal every year.

Read more at Top fashion labels save millions from China’s sustainable supply chain

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Preventing a talent gap in supply chain management

When you hear about skills shortages and talent gaps, the discussion tends to surround STEM — science, technology, engineering and mathematics — professions. However, a new concern also is breaking through.

Supply chain management has become a far more complex and skill-demanding ordeal for businesses in a wealth of industries operating in virtually every location around the globe. This has been driven by the fact that commodities markets, global trade and regional economic conditions have been volatile at best, and show no signs of simplifying or stabilizing anytime soon, meaning that managers of the supply chain have a lot more variables to worry about today than in the past.

Thankfully, it appears as though many businesses, including those operating within the manufacturing sector, are working to nip this problem in the bud by providing their own types of training for supply chain managers to digest. After all, the greatest weapon in the fight against any talent gap is increased investment from the private sector in training and development, and this medicine appears to be more commonly embraced in the modern era.

Automotive excellence
Manufacturing Business Technology magazine recently reported that a new study from DHL revealed automotive giants are likely to face what it calls a “perfect storm” that will wreak havoc on supply chains from around the globe. According to the study, supply chain management professionals, specifically those looking to get a job at an automotive manufacturing firm, already are few and far between, and this problem is expected to become more complex in the near future.

Read more at Preventing a talent gap in supply chain management

How do you deal with the talent gap in supply chain management? Share your thoughts with us in the comment box.

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