Transparency is the lifeblood of modern business transactions. From real-time international wire transfers and electronic health records to tracking transportation or delivery options, digital transformation has revolutionized dozens of industries by unlocking greater visibility, speed, and efficiency.
Supply chain managers and manufacturers have habitually been slow to the digital transformation and transparency movement but are beginning to rapidly make up ground. This transition has been hastened by the recent one-two punch of the U.S. trade war with China and the COVID-19 pandemic. These events built on a litany of prior tariffs, armed conflicts, and other disruptions that have plagued supply chains for decades.
Compounding challenges have clearly highlighted the need for new digital tools that replace the old, opaque ways of doing business: late night international phone calls, painstakingly detailed spreadsheets, flights half-way around the world for site inspection visits, insecure file transfers, and dense email chains.
The pandemic brought travel to a standstill and led to social distancing guidelines that prohibit teams from in-person inspections—realities that urgently underscore why these conventional ways of managing partners and supply chains no longer work.
Supply chain managers know they must move fast to modernize and compress the next decade’s worth of supply chain innovation into the here and now to attain the visibility critical to their survival. In our recent 2020 State of Manufacturing Report, 87% of companies said they are focused on digital transformation as a way to revamp supply chain strategies and avoid future disruption.
The first step in this transformation is to understand what constitutes effective transparency. Imagine a virtual window into the manufacturing ecosystem that provides an on-demand and clear picture of every part in production at all times. The technology exists today to provide this level of insight virtually, meaning there is no longer a consistent need to physically obtain that information.
To make the most of a move to digital-based supply chain tools, managers should prioritize these four features as the core of any digital manufacturing transparency initiative:
- Manufacturing Data in One Place: Single dashboard access to design files, material and process specifications, historical DFM, and invoices;
- On-Demand Production Status: The ability to secure the detailed production status of any part, immediately and online;
- Virtual Inspection Visibility: Virtual or digital inspection photos from partner facilities prior to delivery; and
- Centralized Access to Quality Documentation: On-demand access to material certifications, certificates of conformance, and inspection documentation for cross-functional team visibility.
Embracing Digital Transformation
Rightly, many companies see digital transformation’s cost as prohibitive. Creating this level of radical transparency from the ground up is very expensive, with complex flows of data moving in many directions to multiple stakeholders. It demands connectivity to a host of operational systems and business units, secure engagement with supplier systems, and redundancy throughout.
Digital transformation is never easy, much less under pressure and with limited resources. In fact, only 14% of respondents to the State of Manufacturing Report said their digital transformation initiative is well-funded, while 81% face difficulty finding necessary expertise.
Yet, it is critical for nearly every company if they wish to survive and eventually thrive. While the price tag of transparency might seem high, the cost of avoiding it is far greater. Time is money in manufacturing, and the supply chain is the clock.
Digital Transformation “Light”
Companies that move forward seeking transparency through their own digital initiatives must be focused and disciplined in their change efforts. However, there is another emerging option that provides the same benefits of transparency and digital tools without the pain and sticker shock.
Digital manufacturing ecosystems (DMEs) are an effective alternative to building transparency from scratch. These ecosystems are generally tied together through a cloud-based platform and play a key role by helping engineers and supply chain managers source capacity, whether it’s prototype or production work, from different locations.
DMEs provide users with the ultimate in speed as well as transparency, while affording their respective companies cost avoidance in terms of lofty digital transformation projects. Just make sure you’re working with an ecosystem that carefully vets their manufacturing partners versus a marketplace, otherwise quality may suffer.
For many, DMEs will be the most effective and efficient path to achieving true transparency as well as a way to avoid or mitigate the next inevitable supply chain disruption.