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Data Can Help Defuse Supply Chain 'Bombshells'

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I've been following Boeing's efforts to get its Dreamliner 787 off the ground, an effort that has become a sort of poster child for supply chain problems, for a couple of years now. So I'm interested in recent 787 news. The latest reports aren't exactly positive.

 

According to The Associated Press, the long-delayed delivery of the first 787 may take place in early 2011 rather than this year as Boeing had expected. American Airlines won't take delivery of its first 787s until 2014, two years after the original schedule. Both stories allude to continued supply chain problems.

 

Word of the delays led to analysis like this Procurement Leaders piece that revisits a lot of the ground I've already covered in my posts on Boeing. However, it also includes some interesting thoughts from KPMG's Richard Nixon, who said many companies neglected their supply chains during the recession as they struggled with internal business issues. Consequently, he said, a number of them may be "sitting on a supply chain bombshell of their own" as they gear up for growth.

 

Jon Bovit, chief marketing officer at CVM Solutions, writing on Forbes, says a central and highly accessible repository of accurate data on suppliers can go a long way toward preventing supply chain problems. That sounds simple, but it's obviously not. (If it was, we wouldn't see so many product recalls.)

 

Bovit suggests three steps that may make it easier:

  • Clean and enrich data. As with any other data repository, accurate information is a must. Companies should gather missing or incomplete data, remove duplicate suppliers, and standardize names and categories. They should also look for instances where they do business with more than one "related" company in a corporate structure, which creates opportunities to lower costs and increase leverage with suppliers.
  • Collect and manage. Bovit offers the example of a company that collects supplier data through self-service questionnaires, which has helped it dramatically reduce its supplier-management costs.
  • Measure and mitigate. For risk management, Bovit adivses using a single, unified scoring model that includes all relevant aspects of supplier information. In addition to suppliers' financial health, companies should create and monitor metrics related to performance, strategic importance, supply chain problems, security, compliance and Tier 2 risks (those involving supplier's suppliers).

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