Introduction
“You can have the best technology in the world, but it means nothing if you don’t have the proper stakeholders.”
This is a lesson we’ve learned at Exiger after helping many of the Fortune 500 and government agencies around the world to map, manage, and orchestrate their complex, global supply chains.
Let’s examine some of the biggest lessons learned from assisting some of the largest organizations at scale and how you can emulate them within your own organization.
The Importance of Stakeholder Engagement
Collaboration between vendors and OEMs is vital for gaining insight into relationships and the flow of goods. Without proper stakeholder alignment, it becomes challenging to predict and maintain real-time data. A recent Gartner study revealed that a significant percentage of suppliers (88%) identified collaboration as the most critical element of their supply chain programs.
Data Accuracy and Transparency
Mapping and visualizing your supply chain network is imperative. Risk often lies not just at the direct supplier level but also indirectly within Tier 2, Tier 3, and beyond. Having a solution that allows you to visualize these networks and their relationships allows stakeholders to understand underlying supply chain risks involved, which is important for determining areas for improvement.
Compliance and Risk Management
A robust risk and compliance management solution is a necessity for delivering rich insights that empower you to predict and take proactive measures against disruptions. Whether it’s the port strikes affecting global trade, to the natural calamity in the form of Hurricane Helene, or geopolitical conflicts reshaping supply routes, every organization is compelled to make its supply chain resilient and transparent. Meeting these challenges proactively will see you through to ensure operational resilience and stakeholder trust.
Knowledge Sharing and Informed Decision-Making
Having a platform that facilitates knowledge sharing across stakeholders promotes informed decisions through comprehensive data access. By sharing information such as demand forecasts, inventory levels, production plans, and lead times, you can minimize uncertainty and variability in the supply chain, allowing for more accurate and timely decision-making.
Exiger’s Proprietary Third-Party and Supply Chain Risk Model
1. Promote Collaboration
Supply chain management involves very manual and intensive processes, from procurement down to resilience. To enhance collaboration, consider:
- Enhancing communication through automated alerts and updates. When a risk event that impacts a company’s operations exceed a defined risk threshold, stakeholders should be promptly notified and equipped with a clear plan of action to mitigate identified risks.
- Implementing a solution that leverages automation removes the need for manual tracking and communication, reducing the burden of oversight and minimizing delays in risk mitigation efforts.
- The 1Exiger solution is designed to address this challenge head-on. It automatically screens for sub-tier risk across six critical dimensions — this includes conflict minerals, human rights violations, environmental concerns, regulatory watchlists, financial instability, and geopolitical threats. This is done seamlessly, without requiring vendor interaction or outreach, allowing companies to monitor risk in real time without interrupting day-to-day operations.
- While technology can automate data-gathering and risk assessments, human insight is essential to contextualize that data. For example, a system might flag a geopolitical risk, but it’s up to the stakeholders to determine the best course of action based on the business context.
2. Scenario Analysis and Strategic Planning
In today’s unpredictable supply chain landscape, scenario analysis and strategic planning are critical to building resilient operations.
- Utilizing advanced software solutions to create a digital twin of your supply chain provides a complete view between the physical product and its digital counterpart. This marriage between the physical product and the digital realm of software ensures a holistic understanding of supply chain dynamics, allowing organizations to predict challenges before they impact operations.
- By simulating a digital twin, companies can engage stakeholders in collaborative planning sessions, fostering innovation and collective insights. This approach allows organizations to develop smarter sourcing strategies to ensure continuity of supply and optimize strategic planning. Exiger’s platform provides powerful multi-tier mapping capabilities, allowing users to trace their supply chain from Tier 1 down to Tier N suppliers. Our advanced tools automate Bill of Materials (BOM) mapping and supplier validation, accurately identifying and contextualizing supply chain relationships. This includes mapping sub-tier suppliers, such as legal entities, manufacturing sites, and shipping locations, up to a specified depth. Beyond just identifying suppliers, the platform offers intuitive workflows and validation tools to confirm the identities of Tier 2, 3, and 4 suppliers. It can map specific parts with manufacturing processes and determine their chemical composition, if needed. With one of the largest supply chain datasets on the market, our platform surfaces sub-tier relationships and offers valuable insights into the entire supplier ecosystem. Our automated BOM generation enhances this capability by providing a product-specific sub-tier view of value chains and relevant components using a combination of two highly sophisticated AI systems.
- What truly sets Exiger apart is the ability to simulate various scenarios with precision. Mapping, validating, and monitoring in real-time enables proactive decision-making by tracking forecasts, assessing material needs for different production scenarios, and identifying sole-source dependencies. More importantly, Exiger offers visibility into alternative pathways for assembling products, reducing the impact of disruptions and ensuring business continuity. (BOM Mapping Screenshot 1 & 2)
- This becomes important when we involve multiple stakeholders across different functions in the response planning process. When teams from procurement, operations, logistics, and even suppliers are engaged, they can provide valuable insights and diverse perspectives that a technology platform alone might miss. For example, procurement may identify alternative suppliers, operations might suggest process adjustments to accommodate delays, and logistics can evaluate shipping alternatives.
3. The Importance of Stakeholder Alignment
Licensing software alone is not enough to solve existing challenges; there needs to be a commitment to recognizing and addressing real issues.
- Balanced approach: Successful implementation hinges on aligning stakeholders through a combination of incentives and requirements — both “sticks and carrots.”
- Flow-down requirements: Additionally, sourcing policies that require specific materials to come from designated suppliers are key to maintaining a resilient supply chain.
- For instance, a Program Executive Office can enforce compliance by placing conditions on purchase orders. They might state, “As a condition of purchase, if you wish to sell to us, you are required to log in to the 1Exiger solution and validate your Bill of Materials (BOM).”
- Mandated sourcing: If specific critical materials and raw materials must be sourced from designated suppliers, adherence will be expected and enforced.
Having a solution that facilitates collaboration and outreach to vendors is essential for validating existing data and maintaining accuracy. Evaluating and validating sub-tier vendor data requires their buy-in, but the benefits far outweigh the effort involved. Strategic collaboration with the right software tools can lead to valuable forecasting reports and advanced analytics. As your program matures, it enables you to implement strategies that guide your vendors to source from a select number of key suppliers — often referred to as a directed-buy approach. This not only streamlines procurement but also strengthens supply chain resilience.
Supplier buy-in and input are critical for ensuring that the data within the platform is accurate and up-to-date. Technology alone can’t guarantee data accuracy; it relies on effective collaboration with vendors to validate sub-tier suppliers and track changes in the supply chain.
Values of this approach:
- Window of visibility: See 18-26 months of demand, a longer planning horizon to better run your business and anticipate the demand of parts you are supplying.
- Give vendors access to reports: These can show the parts you are supplying to the OEM or program office, as well as parts you are not supplying but you have the capability to supply.
While many OEMs appreciate the transparency of sharing 18-26 months of demand with their suppliers, others worry that some suppliers will question why they aren’t supplying certain parts when they clearly see there is demand from the OEM and capacity available from the supplier. However, we have found that this rarely happens and the benefits of directed buy programs and better decision-making enabled by this collaborative approach outweigh the risks. Additionally, by helping suppliers understand demand more clearly, this approach can alleviate material shortages, reduce delays, and ensure smoother and more efficient operations; all which greatly benefit the OEM. OEMs that execute this strategy have seen up to 40% cycle time reduction and 22% in landed cost savings.
While technology plays a key role to supply chain mapping and management, true success hinges on an inclusive environment among all participants. By putting priority on engagement and leveraging the right platforms, organizations can achieve the insights necessary to drive efficiency and resilience in their supply chains. Let’s embrace the challenge of collaboration and build a more connected, transparent supply chain ecosystem together.
