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Mastering Disruptive Change in Manufacturing

Optimization and synchronization from end-to-end among value chain partners may one day make a zero-inventory value chain a reality.

By ·

In recent years, manufacturers have been outsourcing increasingly larger pieces of their operations. Even historically sacred cows such as engineering, R&D, and product development are now commonly outsourced, as companies search for flexibility and liquidity at a time of unprecedented global competition and high economic uncertainty.

Original equipment manufacturers (OEM) may be happy to push cost and complexity outside of their company walls—and Tier 1 suppliers may be just as happy to pick up the pieces and build their own vertically integrated operations in a bid to improve their competitive positioning and gain additional margin—but there is a downside. OEMs are relinquishing control over huge chunks of their manufacturing cost structure.

To keep their competitive edge, OEMs need to get back into the driver’s seat and adopt a true end-to-end (E2E) perspective of their value chain—one that goes from their raw material suppliers to their end consumers and, in today’s “circular economy,” even to their recyclers. It’s not so much about collaborating more effectively across internal functional lines or even beyond the company walls, but rather about increasing the level of synchronization, transparency, and trust among all the players in the value chain. What will distinguish the winners from the pack is that the leaders will act as “orchestrators” of their E2E value chain.

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Third Party Risk: Too Close for Comfort
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By ·
Download Article PDF

In recent years, manufacturers have been outsourcing increasingly larger pieces of their operations. Even historically sacred cows such as engineering, R&D, and product development are now commonly outsourced, as companies search for flexibility and liquidity at a time of unprecedented global competition and high economic uncertainty.

Original equipment manufacturers (OEM) may be happy to push cost and complexity outside of their company walls—and Tier 1 suppliers may be just as happy to pick up the pieces and build their own vertically integrated operations in a bid to improve their competitive positioning and gain additional margin—but there is a downside. OEMs are relinquishing control over huge chunks of their manufacturing cost structure.

To keep their competitive edge, OEMs need to get back into the driver’s seat and adopt a true end-to-end (E2E) perspective of their value chain—one that goes from their raw material suppliers to their end consumers and, in today’s “circular economy,” even to their recyclers. It’s not so much about collaborating more effectively across internal functional lines or even beyond the company walls, but rather about increasing the level of synchronization, transparency, and trust among all the players in the value chain. What will distinguish the winners from the pack is that the leaders will act as “orchestrators” of their E2E value chain.

SUBSCRIBERS: Click here to download PDF of the full article.

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Article Topics

Manufacturing · All Topics
Latest Whitepaper
Third Party Risk: Too Close for Comfort
You’ve got a handle on many of the potential supply chain "disrupters" that can paralyze your business. But the real risk is embedded in areas you may have overlooked.
Download Today!
From the December 2017
This is a comprehensive guide to services, products and educational opportunities targeted specifically to supply chain professionals. As with years past, we’re also featuring several articles we trust will offer food for thought in your supply chain throughout the coming year.
Transportation Trends: The last mile, history repeating
Economic Outlook: A Complex and Uneven Scenario for Global Supply Chains
View More From this Issue
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