Estimated reading time: 4 minutes

Digital Transformation: Supply Chain Resilience, Part Two—The Solution

In part one of this two-part series on supply chain resilience, we addressed “the problem” being witnessed throughout the electronics industry regarding supply chain disruptions and their negative effects. These impacts spotlight a worldwide vulnerability that has been brewing beneath the surface, quietly growing for many years, and which was further magnified by the global pandemic. Today, supply chain issues are daily headlines and, in one way or another, professionally or personally, we’re all experiencing the negative consequences of these disruptions. The geo-political turmoil arising from the war between Russia and Ukraine presents the latest twist to the supply chain plot.

Now that we have established “the problem,” let’s get into “the solution.” The solution I am referring to enables previously impossible insights and decision support that bring new levels of supply chain resilience to the electronics value chain. In practice, supply-chain resilience is the capacity of a supply chain to persist, adapt, or transform in the face of change. According to McKinsey & Company, December 2021, “Supply-chain disruptions cost the average organization 45% of one year’s profits over the course of a decade.” This leads me to ask: How can businesses manage risk and plan for a more resilient future?

There are several available options in the industry today that can assist in addressing supply chain issues. A great example is Supplyframe NPI, an SaaS application that builds supply chain resilience into the product lifecycle from the beginning of the new product introduction (NPI) process, accelerating time-to-market, assuring BOM validation, optimizing for target costs, and mitigating risk of downstream supply disruptions. At the core of Supplyframe NPI (Figure 1) is global real-time availability and lead times for over 600 million component parts, plus billions of data signals captured about part supply, demand, risk, and commercial intent. This solution is geared toward supply chain professionals at OEMs and other global manufacturers. However, it’s important to note that this is not the solution to “the problem” on its own.

When we think about a complete supply-chain resilience solution (Figure 2), it needs to seamlessly connect the whole of a design organization with the electronics ecosystem (supply and manufacturing) they depend on to bring a successful product to market. At the heart of the solution is continuously updated, comprehensive component intelligence. For the design organization, this integrated source of AI-enabled data will be used to empower better decisions across the entire product lifecycle at the point of:

1. Component research and selection
2. Part creation
3. Design capture
4. The bill of materials (BOM) review and analysis
5. Product portfolio review
6. Sustaining engineering
7. All the way through to product end of life (EOL)

One solution is needed that can be fully integrated with the electronic systems design platform, and that breaks through the invisible silos in organizations so that better cross-functional decisions can be made, especially during NPI when upward of 80% of lifecycle risks and costs are locked in.

When deployed, this digitally integrated solution will reduce manual intervention, foster collaboration, improve transparency across disciplines, and reduce (or eliminate) respins between design and manufacturing. Fundamentally, this solution will “shift left” real-time component sourcing insights (e.g., cost, availability, lifecycle, compliance), in addition to performance and electrical parametrics, to the engineer’s desktop (Figure 3). This allows for more informed decisions at the point of part selection and the point of design while enabling seamless collaboration between engineering and the procurement team. In addition to component sourcing from approximately 100 suppliers, engineers and designers will be presented with alternates and alerts for component risk graded at a single-part and BOM level.

With streamlined collaboration between procurement and product development established, the traditional serial handoff process is now concurrent, transparent, and integrated. Now fully aligned, design organizations can better manage, adapt, and thrive (competitive advantage) when faced with supply chain disruptions. Ultimately, designing for supply chain resilience can have a significant payoff by translating unexpected events into opportunities for growth.  

Designing for supply chain resilience is based on empowering development organizations and can be implemented with these keys to resilient design, which will be deployed in three phases (Figure 4):

1. Knowledge: This phase is about arming engineers and teams with comprehensive real-time component sourcing data so they can make more informed part decisions when the cost of change is lowest.
2. Intelligence: This phase will further apply the insights from component sourcing knowledge and couple it with part intelligence to empower more informed actions and workflows across the enterprise that solves for both cost and risk. This allows the enterprise to adapt quickly to supply disruptions.
3. Optimization: This phase will deliver a full closed-loop component management digital twin with built-in traceability, comprehended manufacturing experiences, and AI-driven analytics so that the most optimal decisions are made at every point of technical or business decision.

Today, Siemens EDA is currently empowering engineers and teams with the knowledge:

• Cloud connected access to real-time component sourcing knowledge from approximately 100 suppliers at the point of design entry:
  • Component pricing
  • Availability
  • Compliance
  • Lifecycle
  • Links to component supplier datasheets
  • Alerts to potential risks

While the knowledge phase is available today, work is already underway for the intelligence and optimization phases which are soon to follow. Stay tuned for future columns as well as LinkedIn activity regarding the evolution of supply chain resilience.

As stated in part one, the promising and effective solutions that are key to supply chain resilience are based on a three-phase approach that will transform organizations and shift supply chain resilience to the point of design, allowing companies to optimize not only their systems design process but also every link to the stakeholders in the global electronics value chain. By uniting the value chain with the engineer’s desktop, system design companies will see higher levels of digital transformation and the greater profitability that will result as they are empowered to realize, with confidence, the challenges of tomorrow’s designs today. 

This column originally appeared in the July 2022 issue of Design007 Magazine.