CalcuQuote is dedicated to reinventing the electronics supply chain. Whether connecting another supplier’s Application Programming Interface (API) into the global supply chain or creating a marketplace for sourcing shortages via StockCQ, we constantly strive to reduce the largest inefficiencies and explore the greatest opportunities within the supply chain.
Before tackling a challenge, we first identify the desired outcome. We aren’t striving for incremental improvements. We want to make things better. So, we start with a Big Hairy Audacious Goal (BHAG). This BHAG identifies where we want to be and at least some of the work required to get there.
During the Accelerate 2022 conference in Dallas, we had the opportunity to involve our users in this process. In one workshop, we formed small groups with decades of experience from up and down the supply chain.
Each group had the same BHAG (big hairy audacious goal): A supply chain integrated from Request for Quote (RFQ) to materials receipt with no manual intervention. The assignment was to identify the process flow and any potential challenges to overcome as we collectively move towards that future.
Though each group took a different approach, the results identified common issues and challenges to overcome. For this post, I will focus on the three most common and most likely to impact anyone working in the industry. To take the next leap forward, we need to address messy or incomplete Bill of Materials (BOMs), better exception handling, and integrated communication.
Messy Bill of Materials
Every participant at the conference (and in the supply chain?) has had to handle a BOM with incomplete and/or incorrect information. Customers expect their suppliers to be able to identify issues and supplement the information with the correct parts. While that is often true, it doesn’t mean the process is easy, efficient, or cost effective.
Often, the obvious solution is to pass that messy BOM down to suppliers. That may seem easy and cost effective, but it also takes longer and reduces the time available for finding stock, reducing costs, and providing great service.
The group identified the importance of getting customers to provide clean and complete information and using tools to automate the process as much as possible. Any actions, like using PortCQ, to reduce this bottleneck has significant potential to increase efficiency, accuracy, and profitability for everyone.
Exceptions are an inevitable part of the process. Even if they are rare, they likely have an inordinate impact and can totally derail automation efforts. This makes it even more important to plan for and implement tools to handle the most common exceptions before they occur.
The group suggested starting with a small and simple process to identify and resolve exceptions before attempting to scale. One example was automating the NPI process. This is because the jobs are smaller and generally have fewer selection criteria. Sometimes limited to only “is it in stock?”.
Starting small and simple gives perspective and focus and can make it much easier to reach the desired outcome.
The final hurdles can be grouped and managed through integrated communication. Whether working to complete a messy BOM, handle exceptions, chase down an open order, or communicate changes up and down the supply chain, fast and accurate communication is key.
Because the supply chain involves numerous stakeholders with different tools for collaboration and communication, this is a significant challenge. The primary focus should be providing visibility and creating alignment between the stakeholders so each may meaningfully contribute to the process and give the best chance for success.
Better communication won’t eliminate the current supply chain issues, but it makes it easier for each participant to do their part to mitigate risks as much as possible. It potentially allows for proactive actions and prevention of many issues before they require manual intervention.
While integrated communication, better exception handling, and messy BOMs are still an issue, this exercise allowed the group to share ideas, formulate plans, and hopefully start the process of change in their organizations.
For me, it was reassuring to see how our current products and plans align to the needs of the industry as we all work together to solve real problems and reinvent the electronics supply chain.
by David Sharp, VP of Product