CIO
magazine has been running a series on companies with “agile” supply chains – the
ability to respond quickly to changing needs and requirements
both in real time and over time. This piece highlights how
Chrysler has used IT to increase agility, and suggests some
overall principles for companies to consider.
What defines agility? Fast and flexible, for sure,
but also transparency – “Managers
can ‘see into’ systems and, when necessary, make ad hoc adjustments
that keep manufacturing and delivery processes aligned with customers' needs
and their own bottom line.”
A few of the keys:
 |
Look beyond the shop floor: Agility
isn’t just achieved from internal operations, but
by crafting agile relationships with suppliers. Chrysler,
for example, has knitted together a variety of information
sharing and collaboration tools for its suppliers, including
web-based transaction processing, and an “Integrated
Volume Planning” application that shares sales
and forecast data back through the supply base, and collaborative
design tools.
|
 |
Share lots of data: Break
down the cultural and related barriers to broadly sharing
supply chain information with suppliers and distributors.
|
 |
Put timely data to work: Take
steps to capture and communicate more data in real time.
More widespread use of mobile data collection devices
can play a key role in improving data timeliness, and
agile companies are adding event notification and response
systems to take advantage of real-time data. Chrysler
tracks something like 400,000 events/steps in its supply
chain processes, enabling the company to synchronize
delivery with suppliers in a just-in-time mode for 95%
of its parts and assemblies.
|
 |
Get close to your partners: It’s
a two-way street – the information flow needs to
be not only from your company to your suppliers, but
from them back to you as well. The article cites a partnering
effort between Boeing and GKN Aerospace, in which Boeing’s
actual consumption is fed directly into GNK systems,
dramatically improving its production scheduling and
reducing overall cycle times. GNK states it has reduced
inventories by 35% as a result of the effort. The system
was a product of detailed discussions between cross-functional
teams at both companies.
|
OK, this all sounds good – it also sounds very expensive.
Chrysler’s systems were built over many years with automotive
OEM IT budgets. Nonetheless, for the rest of us, I think we
can take some steps to integrate the supply chain and increase
agility that focus on the lowest hanging fruit to start, mapping
cross-company business processes to look for opportunities,
and use the internet to share information (there are many package
products that do that today).
What do you think defines an “agile supply chain?” Is aggressive
use of IT essential to increasing supply chain agility? Can the supplier integration
efforts of the automotive industry provide lessons for other verticals? |