Partnership, transparency and visibility are key words in today’s global business world as manufacturing companies seek to forge even closer relationships with their suppliers. Collaboration has long been the mantra of distributors as they seek to become indispensable parts of their customers’ operations, but a new report on the state of manufacturing points to a heightened spirit of partnership across the supply chain today as manufacturing organizations dig deeper into their supplier relationships for innovation, ideas and long-term planning. The change may signal a new wave of cooperation that will bring businesses closer together even as they reach further around the world to accomplish their goals.
“Companies are adopting a number of strategies to stay ahead of the curve, including a deeper emphasis on collaboration with partners and suppliers in the search for new ideas,” according to the 2013 Global Manufacturing Outlook report from consulting firm KPMG International, released in May. The report points to a new wave of benefits that “will be the most dramatic yet, with a new spirit of partnership, transparency and visibility across the value chain creating enormous economic value from a technology-enabled, demand-driven supply chain,” explains Jeff Dobbs, KPMG’s global sector chair for diversified industrials.
The trend is not lost on the electronics supply chain, which offers a focused look at the growing spirit of collaboration identified in the KPMG report—particularly as distributors and customers forge stronger design/supply collaboration strategies. A pointed example of this is a recent announcement from small manufacturing firm Sensuss on the release of its new sports-impact measurement products. Sensuss credits its seven-year relationship with distribution partner Avnet Electronics Marketing as a key part not only in bringing the products to market but in helping to ensure the long-term success of a start-up company.
“We were looking to buy parts and Avnet filled that void for us. The relationship has ballooned from there,” says Jeff Lawson, CEO of Sensuss, which launched its S2 and S3 sports impact measurement products this summer. Both use a combination of Analog Devices sensors, NXP microcontrollers and a EuroTech Helios aggregator that uses Intel-based technology.“We were surprised at how quickly we became more than just a customer, and that was so important to us. We were not looking for a ‘just quote me the price on 10,000 of these and I’ll go to the next person next time’ type of relationship. We were looking to find a close working relationship with a supplier and we evolved to that really quickly.”
Sensuss’ S3 is a helmet or glove-based device that monitors impacts, capturing the information, using machine-to-machine (M2M) technology to transmit and store the data, and with cloud-based applications providing real-time assessments that can protect the athlete from further potential harm. The S2 is a translucent helmet-based device that lights up when an athlete experiences a pre-defined level of impact, immediately sending an alert that a critical event may have occurred. Both products were rolled out this summer, and Sensuss’ goal is to penetrate the youth sports market with technology that can help reduce the incidence of traumatic brain injuries (TBI). Nearly four million mild traumatic brain injuries (MTBI) or concussions are reported each year due to impacts in sports and recreational activities, according to the Centers for Disease Control.
Lawson says he and his colleagues at Sensuss understood early in the process that they needed strong supply chain partners to help them achieve their goal to design at home and manufacture anywhere in the world for what they predict is a large and growing market.
“One of the keys to choosing a supplier was that we needed someone who had the right roadmap for all of the key products [that we needed],” explains Lawson, pointing to Avnet’s ability to bring together technical experts and key component manufacturers early in the design process. “Very early on, we made a conscious decision to do a single point of contact for all of the [bills of materials]. We said, ‘we want you to stock for our forecast, deliver the products we ask for to us here [in the United States], but also deliver them anywhere that we stipulate in the world.”
Forging Stronger Connections
According to the KPMG report, today companies view their channel partners as more of a network critical to achieving a “demand-driven” supply chain—one that provides a real-time view to total demand, supply and capacity information.
“For companies of all sizes, genuinely closer working relationships between suppliers and other partners will be critical to maximizing their responsiveness to changes in the market,” the report points out. “More effective and efficient collaboration enables firms to optimize inventory, logistics and other operational costs.”
Such activities are a crucial part of the Sensuss/Avnet relationship. Both Lawson and Avnet EM account manager Stan Marszalek point to the companies’ close collaboration from design through to production, which includes not only technical support on the design side but also special supply chain logistics programs that balance end-market forecasts with supplier lead times and other key issues to ensure a seamless flow of products and support services.
“[Sensuss] needed a solid roadmap. When we sat down with Jeff, we talked about the business requirements from prototype, to production, to next generation, to costs, logistics and so forth,” explains Marszalek. “We have a centralized, focused team for both technical and logistics support, so we’re there to provide the entire support package—from early design support now moving into production and [going forward].”
Lawson characterizes it as a higher level partnership than what may have occurred in years past.
“Supply chain is really the wrong word, from our perspective,” Lawson says. “What we were looking for was not supply chain. The old word is that sergeants talk supply but generals talk logistics. We needed the logistics to replenish our stock, align ourselves with technology, to figure out the vendors we needed to be with, to target our product to market and to provide service. That’s what Avnet provided.”
Ideas, Not Just Supply
Looking ahead, both Lawson and Marszalek say the partnership will grow, especially in light of its forward-thinking nature. They say they have taken next-generation activity into account from the start of the project, for instance, planning for a continuous and rapidly evolving product cycle.
“I think it’s easy to think about this in a singular format: we had this idea, we designed this product and now we’re taking it to manufacture,” says Lawson. “But we’re doing so much more than that. We’re focusing on next-generation activity now. We’re also in the stages of redesigning on two separate fronts—our design team is different from our manufacturing team and Avnet is interfacing with both.
“So it’s a never-ending cycle. In this product portfolio we have a tremendous need to stay ahead of the rapid-turn cycle. So we need to align ourselves with the right suppliers and line everything up to meet our roadmap.”
Lawson echoes another key point from the KPMG 2013 Global Manufacturing Outlook: that, increasingly, companies are placing the supply chain at the center of their strategies to innovate.
“Many companies are starting to see their suppliers as a source not just of production and logistics but also of ideas,” the report says. “Half of our survey respondents say that partnerships, rather than in-house efforts, will characterize the future of innovation.”