products supply chain

Managing Supply Chain Risk in Outsourced Manufacturing

With all the intended benefits of supply chain outsourcing, brand owners are significantly challenged by the lack of supply chain visibility and the inability to respond to constant changes. This results from the fact that most essential supply chain management (SCM) information now resides at third parties and/or distributed locations. Yet, brand owners remain directly accountable for customer satisfaction, delivery performance, and their own financial results and compliance requirements.

Brand owners have become "virtual enterprises" with supply chains comprising EMS providers and contract manufacturers, suppliers, third party logistics providers, regional sales offices, inventory hubs and warehouses and, ultimately, the customer. While the business has become virtual, brand owners are still accountable to customers and shareholders despite no longer having direct control of execution.

Traditional Solutions Don't Support Distributed Supply Chains

Superior operations performance in this environment requires synchronization across several tiers of the extended value chain—a real time supply chain. Systems originally deployed for managing internal operations were not designed for this new reality. Effective multi-party collaboration, rapid response to frequent change and heterogeneous systems integration among the supply chain partners are key to achieving the desired results.

“Companies that don't have access to the data from outsourced systems are at a significant disadvantage. As well as being unable to monitor their outsourcing efforts, they cannot have available an integrated view of critical aspects of operations such as customers, suppliers and business processes… Determining the right level of performance to meet standards of information quality and customer satisfaction require a holistic view of the business. But with business operations increasingly managed by a multitude of outsourcing providers, most enterprises lack knowledge of those operations because important data about them lies outside the corporate firewall.”

Mark Smith, chief executive officer and senior vice president research, Ventana Research

Response Management enables real time supply chain visibility, multi-enterprise collaboration amongst front-line decision makers, and enhanced supply chain management agility. By empowering front-line decision makers with the insight and tools they need, they can quickly and effectively respond to a wide variety of supply chain problems spanning the virtual enterprise with coordinated action.

As an on-demand service, RapidResponse can be deployed quickly to empower all front-line decision makers. With access to real time supply chain information from disparate enterprise systems and collaboration across extended supply chains, all virtual enterprise supply chain management participants are able to quickly reach decisions that align with corporate objectives.

• Watch the EMSNow webcast to find out how brand owners and manufacturers such as Teradyne and Solectron (now Flextronics) drive operations performance in outsourced relationships.