![]() Please email us at: A beacon of coordinated teamwork If you would like information about this content we will be happy to work with you. We strive to provide individuals with disabilities equal access to our website. The cross-functional decision-making platform allowed for immediate consultation, with implementation of decisions across multiple departments and objectives able to happen concurrently (Exhibit 2). On an administrative and executive level, decision-making processes were restructured with multipronged coordination in mind. This enabled the company to reconfigure its business policies and geographical priorities, optimizing resource allocation-all while constantly assessing key performance indicators. These analytical decision-support engines mapped supply to demand and made complex allocation decisions involving more than a hundred possible BOM constraints and optionalities, quantifying the output of diverse scenarios across different metrics. The control tower also harnessed data to develop sophisticated analytical engines and predictive forecast models. Stock and production volumes could be altered to better accommodate a lower attach rate and high-margin production priorities.ĭigital dashboards further streamlined and automated downstream and upstream communication, enabling end-to-end visibility of, for example, product recovery time, utilization by plant, and inventory health by product line. Please email us at: supply was rerouted or prioritized according to supply conditions and product categories. Exhibit 1 provides examples of tactical and strategic levers. A set of tactical levers could be deployed to manage the chip disruption-increasing supply, managing demand, and mitigating the impacts of the shortage. Transparent information flow gave management a fuller picture of incoming procurement, outgoing production, and sales priorities. Once the cross-functional control-tower structure was established, open channels of communication allowed for easier planning and data sharing. The focus shifted to upstream supply and component allocation-with attendant complications from managing bill-of-materials (BOM) issues and downstream customers. On downstream elements, such as service levels and channel allocation. By establishing a supply chain management hub, or control tower, the company could coordinate and consolidate efforts to manage the crisis, bridging the gap between internal departments and suppliers.Ī control tower is a proven, iterative way of solving supply chain issues however, it is usually focused One major obstacle to improvising effective solutions was a lack of centralized data sharing. This insight guided a major global manufacturer to find an innovative solution to this dysfunctional situation. As a knock-on effect of supply chain defaults, relationships between manufacturers and suppliers can deteriorate.īut even in this chaotic context, those who manage their supply chains better have shown that theyĬan thrive ahead of competitors. Decisions can be impulsive and poorly informed, and executive structures may be at odds with one another, unable to work toward holistic solutions. Pandemic aside, working under such conditions leads to stress, low morale, and a general lack of team cohesion-not an environment that is conducive to crisis management. Analysis, planning, and communication are often compromised in the name of damage control, with immediate logistical and administrative concerns given priority. Crises of this nature are exceedingly difficult for manufacturers to navigate. Manufacturers that used the chips in their products were in many cases overwhelmed, unable to meet the new demand, which quickly translated into dead stops in production, with significant damage to growth ambitions and bottom-line performance. Panic purchasing, coupled with last-minute order changes or cancellations, supplier shutdowns in Asia, and political instability in parts of the world, resulted in a supply collapse across many markets. ![]() With the boost in digitization across industries-accelerated by a widespread move to remote labor and other changes brought on by the pandemic-demand for semiconductor chips exploded beyond capacity in 2020.
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