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SCM is the planning and execution of supply chain activities to ensure a coordinated flow both within a company and with integrated companies.
The advent of the digital age has powered business to Internet speed. Buyers go online to surf the world in search of what they want, at the best prices. Retailers are racing to keep up with consumers.
As a result, “we are seeing a lot of the trends set in the manufacturing industry by the retailer as they demand more and more from the manufacturer,” noted Fulvio Lana, general manager of SSA Southeast Asia, a provider of extended enterprise resource planning (ERP) solutions.
Manufacturers no longer have the luxury of taking years to develop, market and sell their products. For instance, mobile phone makers have seen their design cycle shrink from 18 months to just 6 in the last few years.
As customer preferences and demands shorten the lifecycle of a product, said Lana, manufacturers have to produce shorter production runs to ensure minimal inventories in the supply chain to reduce product obsolescence.
Further complicating matters is the evolution of the manufacturing process itself, which is becoming more global in terms of suppliers and customers.
“As manufacturing becomes more diverse and spreads across countries, both from a production and distribution perspective, manufacturers require improved visibility and real-time information if they are to successfully manage the supply chain and respond rapidly to market and customer demands,” said Lana.
Manufacturers in the region are still adopting traditional SCM products in areas such as supply chain planning, factory scheduling, demand forecasting, transportation planning and warehouse management.
However, as they find themselves having to respond quickly and provide information in collaborative environments, manufacturers realize that improvements are needed within their own operations.
Venturing beyond traditional SCM products into new areas of supplier collaboration, customer collaboration, radio frequency identification (RFID), and product lifecycle management (PLM), may be in the offing.
What’s the hype?
“As bandwidth capability and Internet availability increases, manufacturers are quickly taking advantage of the Internet for managing solutions across the many countries in the region,” said Lana.
Pranav Kumar, research director of enterprise application software, with research firm Gartner Asia Pacific, estimated that collaborative planning applications, which enable the sharing of planned demand or supply data with trading partners, will take two to five years to realize its potential.
With RFID, where tags attached to pallets, boxes or items enable objects to be tracked throughout the supply chain, Pranav projected that it will take 5 to 10 years before it becomes pervasive.
A very exciting innovation for the manufacturing industry, said Lana, is PLM. Such systems tie everything together, allowing engineering, manufacturing, marketing, and outside suppliers and channel partners to coordinate activities.
Despite the improvements and the promise that SCM solutions are bringing to supply chains, the new technology is not a panacea for all the little headaches that manufacturers can face.
PRODUCT LIFECYCLE MANAGEMENT
PLM is a process that leverages product information to guide products from concept through retirement, explained Andy Kalambi, vice president of Asia Pacific with solutions provider MatrixOne.
“The software makes use of product information and business analysis to support the product’s portfolio strategies, lifecycle planning, activities management, and the execution of the activities through each phase in a product’s life.”
By providing a unified collaborative environment, PLM enables the collective knowledge of the extended enterprise to add value at any stage of a product’s lifecycle, said Hans-Kurt Lübberstedt, executive vice president of UGS Asia Pacific.
“PLM allows downstream players to participate in the earliest stages, which can determine up to 80 percent of a product’s development cost.”
It can manage all of the intellectual capital to support the entire product lifecycle, including product, process, resource and supplier information.
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