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Supply Chain Which Supply Chain Suits You? By John Daker, VP of Business Development, Riverwood Solutions


to select the supply chain that you need, rather than following a trend or using the supply chain that suits your vendor. Your vendors may have mixed priorities, and while they probably have good intentions, they will still want to balance the utiliza-


I


Agility can be key in any supply chain, particularly


with fast-moving consumer goods where the market is fickle and new designs


need to come to market quickly.


tion of their factories around the world. This might mean that your product is being made in a location


n the supply chain world there is no silver bullet — no one-size- fits-all solution. The challenge is


that is better for your supplier’s business objectives than for yours. The alternative to following es-


tablished trends is also fraught with danger. Moving production to China was the biggest trend 10 years ago, and while it saved money for some companies, it was only the best solu- tion for a few. Many companies have since moved projects back from Chi- na to Eastern Europe, Central America, and even to higher-cost re- gions like the USA where proximity to design and the consumer market is a big value-added component.


Supply Chain 101 Creating the ideal supply chain


is matter of identifying priorities. Is time-to-market the most important thing? Is it price at volume, or is it a compliance or quality demand that takes the lead? The second task of designing


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the right supply chain is to decide where to manufacture and whether or not to use a single source. The early part of product development may require a much closer relation- ship with the vendor than later in the process when proximity to the customer becomes more important. This may mean finding a partner with multiple geographical locations or it may mean using two complete- ly different vendors that can share design and product data. A risk when using two vendors


occurs when they are kept separate and the whole design for manufac- turability phase has to happen twice.


What about fulfillment? Early


consideration as to the location of your customers and how to get prod- uct to them is essential. If you have the time, sea freight can save a lot of money, but the cost of goods at sea in terms of inventory will need to be balanced with the risk that comes with having a six-week delay built into the supply chain. Agility can be key in any supply chain, particular- ly with fast-moving consumer goods where the market is fickle and new designs need to come to market quickly. Downstream vendors can also


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have an impact on supply chain de- velopment. Supply chains do not op- erate in vacuums. They are complex and connected ecosystems. Your ma- terials and their sources will influ- ence the choice of vendor. Mechani- cal parts such as metals or plastics may dictate the best place to build a given product. This may be true with your vendor’s vendors too. You’ll need to explore a few tiers down to get the right sort of robust and low-risk supply chain.


Risk Analysis We have all read plenty of arti-


cles on reshoring. You should never be led entirely by politics, but it is worth considering what political, cultural or marketing value your manufacturing location brings. It is interesting to see Apple products emblazoned with the words “De- signed in California,” in order to draw attention away from the fact that they are “Made in China.” Thought should also be given to


the so-called “soft” issues that can become serious when getting into fields like military and aerospace, or when a preference becomes a com- pliance issue. What is your perspective on so- issues?


cial and environmental What is the potential fallout of bad


publicity surrounding certain loca- tions, labor relations or conflict ma- terials? Finally, consider risk mitiga-


tion in the supply chain. Dividing a business between two vendors can


December, 2016


John Daker, Vice President, Business Development, Riverwood Solutions


be risky, especially when the prod- uct is initially in modest volumes. But, being with a single vendor brings its own share of risk. Other risks come from further down the supply chain with downstream ven- dors. A proper risk analysis is essen- tial to supply chain planning. Clearly, not all products are


created equal. As a result, vendor and supply chain selection is a mix- ture of science and art, and experi- ence with the process. Getting it right is not easy, but getting it wrong can be disastrous! r


John Daker is a career operations, engineering and supply chain profes- sional with more than 15 years of global operations experience that he brings to his role at Riverwood. He has held engineering, operations, and program management roles at several companies including NASA, Flextronics, NHT, PowerFile, and Tesla Motors. John has worked with products in consumer electronics, networking, photonics, and managed manufacturing facilities producing audio components and electric vehi- cle power trains.


Riverwood Solutions helps OEMs and Brand Owning Enterprises of all sizes with manufacturing strategy, supply chain operations optimization, sourcing, and supply relationships. The company provides consulting and managed services to the world’s lead- ing technology product companies.


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