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Engineering and the role of the integrated supply chain

6 minutes | 03 Jan 2019

Man in hard hat walking through warehouse

The advent of the Internet brought with it many benefits – and not just for the average consumer. As technology advances, so does the way in which businesses can go about their vital operations. Nowhere is that more apparent than in the engineering arena.

Thanks to shared management information systems, as a result of supply chain integration, day-to-day processes in the manufacturing industry are becoming even more efficient. But how can interactive networks communicate with one another more effectively – and what does this mean for the future of manufacturing?

The ability to track materials – from supplier to manufacturer

There’s traditional supply chain management and there’s integrated supply chain management. The latter ensures doing business – across multiple suppliers and platforms – is a breeze. The reason for this is simple: companies can follow components wherever they are, tracking information and materials across the whole chain. This allows them to better look into their business processes in a bid to make improvements and savings along the way.

The role of the integrated supply chain focuses as much on ascertaining if processes are working well as it does on identifying operations which aren’t as successful. Often abbreviated to ISCM, the Integrated Supply Change Management system looks at coordination and operational issues during manufacturing.

The Logistical Execution System (LES)

Working to coordinate decisions with other agents, the Logistical Execution System (LES) is just one part of the integrated supply chain. It comprises intelligent agents which perform one or multiple supply chain operations. What this does is streamline the manufacturing processes to ensure a smoother, more cost-effective project.

Everything from cloud computing, big data and the Internet of Things (IoT) is transforming the speed of the supply chain. They’re also all changing how efficiently the industry performs, with product development, distribution and logistics and manufacturing seeing huge operational changes.

In product development specifically, the introduction of Virtual Reality (VR) and Augmented Reality (AR) are helping fast-track components’ time to market. They’re also improving collaboration opportunities.

For manufacturers specifically, cyber-physical systems are making autonomous decisions alongside their human counterparts, with fault diagnostics even providing access capability on a remote basis. Stock volumes and replenishment processes can also be highlighted, thanks to sophisticated ERP software.

Speeding up the delivery process are AI systems, which help companies handle large volumes of logistical information.

Lower costs for P&G

A host of companies within the manufacturing sector are already getting on board with the integrated supply chain and the many benefits they can enjoy as a result of it. Procter and Gamble is just one such case study. When in-store sales and price promotions meant customers began to demand products in higher numbers, the company duly spent millions to keep up with this demand. Inventories, logistics, warehouses and large capabilities in terms of manufacturing were, of course, required.

Smart factory with artificial intelligence icon graphics

In time, a revised – and more effective – plan of action was needed. It was then that P&G modified its supply chain focus. A partnership with Wal-Mart meant the company could pretty much eradicate all price promotions. It could also look at streamlining its replenishment programmes and logistical operations. Lower costs overall were a result, as well as a reduction in uncertainties when it came to product demand.

The benefits of the integrated supply chain: at a glance

  • Shorter leads times for customers
  • Lower inventory costs
  • The chance to pinpoint problems, due to improved collaboration
    with vendors
  • The opportunity to gain insight into inbound and outbound
    logistics via a single system
  • A fully scalable system that can develop with the business

Helping businesses pull in loyal customers, integrated supply chains are instrumental in the successful operations of a company. “You can obtain such a broad-spectrum view from a variety of data sources, including your supply chain systems, sales and marketing, customer service and field service systems, internal database information, and knowledge gathered from unstructured interaction with customers," says David Caruso, the Principal of David Caruso and Associates, a consulting firm which specialises in manufacturing supply chain strategy.

It's essential to stay competitive, too – and by ensuring consumers can get hold of the products they want and when they want them, businesses can trample their rivals. In fact, the introduction of ‘smart integration’ is described by Industry Week as a ‘game changer’.

Allowing manufacturers to use data to improve or refine their systems – via data generated from consumers’ buying habits and decisions – an integrated supply chain is important for forecasting future trends. Integrated supply chains help ramp up a given company’s security efforts as well, highlighting threats and opportunities during the process.

Integrated supply chains help customers, too

On a customer service level, businesses who use integrated supply chains can incorporate key systems with popular social media platforms. What this does is ensure consumers can enjoy the very best service via the clever, yet controlled, use of their data.

For companies who’d like to increase end-to-end visibility, third-party logistics provider (3PL) can be integrated with outsourced freight auditing programmes. Using blockchain technology – one of the newest and most exciting additions to supply chain management, manufacturers can enjoy the possibilities increased accuracy will bring to their operations. This might then cut out the need for invoice auditing programmes, with the aim of further reducing overheads.

Consumers can also benefit from IoT technology – and the ways in which manufacturers can integrate it into their processes. By gathering data across millions of devices, businesses can take advantage of the chance to see exactly what consumers want and need. The future of engineering, thanks in part to the integrated supply chain and its ever-evolving developments, looks bright too. With the number of IoT-enabled devices thought to surpass 40 billion in just two years’ time – according to ComputerWeekly.com – companies will likely have even more opportunities to turn data into insights they can effectively utilise later down the line.

On top of this, automated data collection and processes mean fewer employees. Fewer employees mean the chance to lower operational costs and/or increase productivity amongst staff. More good news for employees, too: integrated systems can help staff voice their ideas and concerns. They may also be able to access performance records via integrated systems, submit data and reports, and more easily feed back to their line manager, when required. By building a rapport with their employees, managers can ensure an even more efficient workforce – and greater success in terms of their manufacturing output.

An indication of things to come

The engineering industry has been preparing for a more integrated supply chain for some time, according to the organisers of an annual event for engineers at Birmingham’s NEC. At last year’s event alone, spokespeople from a host of companies occupied stands covering aero engineering, composites engineering, automotive engineering, performance metals engineering and connected manufacturing. The latter was a new category for 2017 – an indication of things to come for the sector.

Connected manufacturing is key

The event’s Connected Manufacturing zone highlighted the opportunities between customers, suppliers and innovators, marking a huge step for the industry. This fact is championed by Glenn Steinberg, EY’s Global Chain Leader, in Supply Chain Digital. He suggests it’s an ‘amazing time to be a supply chain practitioner’, as the scope for increased end-to-end visibility and the ability to make ‘faster and better decisions’ are at the forefront of every manufacturer’s mind.

Before, supply chains were ‘very linear’, says Steinberg. Digital technologies have changed all that, though. Now that all the data’s in the cloud, it’s simpler to access that information across the whole chain. It’s about solving real problems, continues Glenn, using the right combination of technology.

“It may require a combination of different digital technologies to pull that off, whether it’s AI, 3D Printing, Blockchain, or Augmented reality.” he continues, before adding that you can’t simply apply them all.

For companies looking to overhaul their supply chain in line with new advancements, the technology is very much ready and waiting. By embracing the digital world with both hands, businesses in the engineering sector can improve their processes and increase their customers’ satisfaction.

Ensuring collaborations are swift and smooth, an integrated supply chain can make everyone’s lives easier – from the innovator, the manufacturer to the end-user. The length of a single engineering project means integration can be achieved more easily. This is particularly apparent when partners work together over a number of stages. After all, by better understanding the supply chain capabilities, lead-time can be minimised – and from concept right through to production. This will inevitably reduce the time it takes for a component to make it to the shelf, too.

Taylor & Francis online also suggests that costly redesigns as a result of ‘new customer expectations or a change in requirements’ may no longer be required. This was evident in the case of Airbus A380’s development process, which lifts efficiency ‘due to fewer operational costs’.

Planning well ahead of a project – and ensuring you have the right components, as well as the correct technology and staff levels – is key. Timing is also vital, suggests ScienceDirect.com – and contractors, as well as suppliers, should be brought on board early. This will allow them to collaborate more effectively and ensures a more successful project all around.

industry 4.0