OEMs are relying on an ever-expanding network of suppliers to provide everything from raw material to major subassemblies. The adjustment is in part fallout from the ascension of third-party logistics companies like Amazon, which have grown exponentially in large part because they can take an order for just about anything and deliver it immediately.
Amazon is enabling consumers’ interest in mass customization. Products can add or lose features to be just right.
Some OEMs are embracing the expanded role of integrator—and seeing that they can differentiate themselves from their competitors by going with the flow: They need to be able to design, assemble and manage a supplier network that can support this new concept. Sometimes, shipping direct to consumers is also part of the deal.
Managing the larger network of suppliers can be a bear. But there is a clear solution: “network centric manufacturing” (NCM).
Pioneered by the Air Force Research Lab (AFRL) a few years back, NCM is the rapid assembly and seamless coordination of dynamic supply networks to accelerate production, reduce costs and manage the supplier network.
NCM has three basic tenets:
- agile networks that can be easily reconfigured from order to order with minimal cost and effort;
- seamless connectivity allowing the networks to share information throughout the network, regardless of systems or technologies,
- visibility throughout the network that lets trading partners see their product flow through all processes at all suppliers.
People involved in the AFRL NCM research see NCM as the probable and preferred enabler that can provide the US with a competitive edge in manufacturing.
Recently, a startup firm called Prime-Supplier (previously ACT) on the Florida Space Coast refined its Visual Supplier Assessment and Analysis Modules (VSAAM) software to support NCM. VSAAM was developed to support NASA’s Space Shuttle program and now has eight modules: supplier visibility, supplier discovery, component visibility, supplier relationship, demographic analysis, anti-counterfeit, disaster assessment, and economic resilience.
Now supported by the Ohio Supercomputer Center (OSC) AweSim program, Prime-Supplier is building a new module for supply chain solutions. The first release of this module is expected this fall. (AweSim was formed through a public-private partnership between the state of Ohio, OSC and six high-tech firms.)
Prime-Supplier’s new module will use modeling and high-performance computing to enable the design of a new multi-tier supply chain or stress test an existing supply chain, allowing for multiple “what if” scenarios to assess risk and create mitigation plans to resolve problems before they arise.
In a complex product, this could include hundreds of suppliers and thousands of manufacturing operations/processes.
The VSAAM-NCM software will help not only OEMs but also third-party logistics firms like Amazon that are always evolving their business models. Using VSAAM-NCM software, such a firm can create and manage a supplier network, creating a virtual firm that can cut delivery costs and time.
This could well avoid expensive problems.
A few years back, a distributor of pharmaceuticals and medical products called Cardinal Health had an issue with a supplier of pre-packaged surgical kits. Because of a problem with one component, the supplier couldn’t deliver those kits, and hundreds of hospitals using them in the US shut down their surgical units for all but emergencies—for nearly two weeks. The supplier’s vulnerability cost Cardinal millions of dollars and severely damaged its reputation.
This article was first published in the October 2016 edition of Manufacturing Engineering magazine. Read “NCM Can Help OEMs Struggling to Manage Supplier Networks ” as a PDF.