There is no shortage of data within the electronics supply chain. Suppliers, distributors and customers share forecasts, inventory data, order status and compliance information; they transact business in multiple languages and currencies; they monitor their partners and external inputs for potential disruptions and they keep abreast of their competitors. Yet the push for more data is on: Big Data will give corporations deeper and more “actionable” data and the IoT will capture and process information from billions of connected devices. The electronics supply chain has to capture and process the data most meaningful to its constituents and utilize it toward improving visibility, managing risk, reducing costs and a myriad of other tasks important to the OEM customer base.
Distribution has recognized the utility of technology and tools in the data management realm. When off-the-shelf systems for tracking components across the world weren’t available, distributors developed their own. So what are the technologies currently impacting the supply chain, and how are they being used?
A recent survey of supply chain managers by online researcher YouGov and supply chain platform provider GT Nexus asked which technologies they believed would most impact their companies this year. The top three were, in order:
- Advanced Analytics (13%)
- Internet of Things (11%)
- 3D Printing (9%)
Data provides the visibility needed to make better decisions; advanced analytics help users cull through reams of data. What’s less apparent is the utility of the IoT. “As well as being a driver for business and supply chain transformation,” research firm Gartner said, “IoT can also drive incremental benefits to existing supply chain processes spanning asset utilization, warehouse space optimization or production planning.” IoT is already impacting the supply chain for manufacturers – i.e. the smart factory – and will continue to help the industry reinvent itself by facilitating better visibility and reducing blind spots. This is done by providing intricate data on everything from weather and climate, to location information of transportation vehicles to delivery timing estimates and more.
Data, from different sources and of different types, and IoT may not be the sole answers to solving supply chain issues for manufacturers, but they can make problem resolution more efficient, Garter concludes. 3D printing holds the most promise in maintenance, repair and operations (MRO) distribution: proponents envision the ability to assemble a single device on site and eliminate the need for holding obsolete inventory.
When it comes to technology investment, supply chain executives tend to focus on the operational side of the supply chain. The top three areas of investment, in order, are:
- Inventory Management (64%)
- Factory Management (35%)
- Transportation Management (34%)
It is no surprise manufacturers still direct their resources to inventory, factory and transportation management solutions as these technologies help align efforts of all parties involved, give employees enhanced visibility into their specific departments, and help companies break down the walls to operate more effectively and efficiently. At first glance, these tools may seem like a quick enhancement on the execution side for any supply chain in the enterprise stage, but there are other considerations to keep in mind as companies continue to innovate, such as the impact technology can have on supply chain finance and supplier collaboration.
When it comes to future use of technology, companies aren’t only looking at execution based solutions but also planning based solutions, such as inventory and network optimization. The 2015 Material Handling Institute annual industry report titled "Supply Chain Innovation — Making the Impossible Possible" notes 80 percent to 90 percent of respondents plan to have these tools in place by 2019. The adoption rate for growth technologies such as predictive analytics, wearables and mobile technologies is also expected to rise, reaching 70 percent in the next three-to-five years.
Much of this investment is targeted at obtaining and managing information. Data provides the visibility needed to make better decisions. In the electronics supply chain, distributors – which interface daily with suppliers, customers and logistics providers – are in an optimum position to utilize information toward end-to-end visibility. If businesses can collect data about where a shipment is at any moment, along with any risk implications, lost and delayed shipments have a better chance of being avoided. This way, companies will be able to be both reactive and proactive.
TTI’s AIM program, for example, matches customer order data with available inventory and leadtimes to ensure on-hand availability and prevent shortages. The tool also takes into account inventory storage space, freight costs and shipment size so customers can make the most efficient planning decisions for their production needs.
As supply chains become increasingly complex and susceptible to disruption, an agile supply chain that enables seamless adjustments to be made on the fly is critical. Having visibility across the supply chain and its involved business partners is the single most important way to proactively sense and respond to disruptions, and thus mitigate their impact.