Summer is the Festival of Real Estate with families and individuals buying and selling homes at a feverish pace. The mantra on which all people agree is “location, location, location.” It’s all about geography, be it regional or at the neighborhood-level. No matter what neighborhood we choose, or where we are on life’s journey, we want to live in a neighborhood that’s on its way up, not down.
The primary factor that determines whether the neighborhood is going up or down is not the grandeur of the architecture. There are neighborhoods with wonderful old mansions that are now blighted, which translates into being crime-ridden and insecure.
The Supply Chain Neighborhood
Another location-intense environment: the very definition of “supply chain” is based on location, i.e., the reality that the links in the chain–the suppliers– are at locations usually far from your company, arrayed on various “tiers” with varying impact on your products’ success. This physical reality, the geography across which the chain is dispersed, inevitably determines how the supply chain must be managed.
Viewed in total, your supply chain, no matter how big or small it is, how many tiers, and how far-flung, constitutes a virtual “neighborhood.” Some of the nodes in this network might be around the world from you, some nearby, some three layers or more down. (In fact, you may not even know that some of them exist.) But in the end, it is your turf because of the impact they can exert on your customers.
Whether it’s fair or unfair, you may have discovered that it’s considered “yours” from the scandals that have cropped up in recent years. The problems may have happened layers down, and far away, but who made the headlines? It was the biggest brand at the market end of whatever chain was involved.
Distance Is Not Linear
The geographic dispersal is not the end of the story about the distance between your geographic location and your suppliers.
There are various “distances” creating challenges for the proper management of complex supply chains dispersed around the globe. Those distances influence the kind of “neighborhood” your supply chain is, in terms of effectiveness and security. In some chains, there are issues with conflict minerals, issues associated with social responsibility, with transparency, material quality, and the gaps between cultures. In contrast with the research homebuyers can conduct about their homes and neighborhoods with a few clicks, your supply chain data is much more difficult to obtain.
The cultural distance expressed in differing interpretations of what’s important is itself exacerbated by the communication distance we call the “language barrier,” conjuring the picture of literal walls among regions. Compliance and quality data collection are supposed to manage the dispersion’s cost advantage with consistency of material quality and best business practices.
In addition to the risk of all the material/supplier specific data that is supposed to be in play, there are deployment and support issues of experience, talent, cost, and time availability to manage sophisticated data flows across the Internet.
Scope and Complexity
Supply chain management projects focusing on quality assurance can have scopes so large and complex that on the surface they can rival ERP (Enterprise Resource Planning) implementations. Entire supply bases, co-manufacturers, enterprise facilities, distribution centers and even customers can (or must) be brought into the system, and set up to be consistent and reliable quality data contributors, all with the purpose of creating a “safe neighborhood” in which the supply chain can thrive.
In contrast to ERP systems however, a supply chain management system that focuses on quality assurance must have information about each of its suppliers and key sub-suppliers:
- Is the supplier compliant with industry standards?
- Where does every material the supplier uses come from, by production facility?
- When was the material shipped?
- What are the quality characteristics the material exhibits?
- Are the characteristics are within specifications?
The physical reality behind the abstract concept “multi-tier supply” begins with the raw materials being mined, grown, caught, cut, etc. and being moved to various processing facilities. There, transformations begin, turning raw materials into components or ingredients made-to-stock or to customers’ specifications. Even at this early stage, each of the questions above must be asked, and the answers received backed up by reliable data. The answers must be evaluated and securely documented. From there, the questions move on to focus on product manufacturers who sell their value-added production through distribution outlets, or further adapt their production (for example, for private labeling) to meet specific customer requirements, generating another wave of supply chain quality management documentation to be secured and managed.
The entire constantly-dynamic process described above is shaped, in addition, by regulatory requirements, and by the nature of the competition in the industry. All these dimensions, in addition to the production itself, demand oversight for quality assurance. Geographical distance – the location of any one of these nodes – is irrelevant where it comes to how stringent the supply chain quality diligence should be.
Data Versus Actionable Knowledge
This geographically dispersed, diverse group of independent companies needs to constantly provide data through methods and systems that are manageable. The methodology used must turn volumes of data into knowledge, the difference being that data is data, while knowledge leads to action. What’s more, it must do so quickly enough to allow the company to intervene before the entire process is damaged, and it must do so at a reasonable cost. That means it must use SPC (statistical process control) for the data to make sense in time for you to intervene.
Location, Security, Efficiency
“Location” is a fundamental reality for managing a complex, multi-tier supply chain. However, the issue of “Security” is the fundamental purpose of any supply chain quality assurance management system. While it’s not true that to be secure, you have to live in a prestigious neighborhood with fantastic architecture, it’s also not true that to protect your supply chain you must spend enormous sums of money that will damage your bottom line.
Selecting a methodology to implement a SCQA project is complex in itself. A number of factors must be considered, including how efficient (including cost-effective, least disruptive to your basic operations, most accessible to far-off members of the chain and how secure) the solution you are considering really is. Some questions to consider during the evaluation process include:
- Do you know all the suppliers in your supply chain?
- Are there inputs to your supply chain that make it essential to reduce material variability?
- Are there different methods of producing Certificates of Analysis than those currently being practiced in your supply chain?
- Does your company have a web-based method for tracking supplier non-conformances?
- Is it critical for you to see material performance trend charts?
- Is it important is it for you to have close to real-time access to data about supplier process performance?
- Do your suppliers’ materials affect your yield? Your product safety?
- Is your market demanding greater traceability and transparency in the supply chain?
Maintaining peak security around the maze of geographically-based data exchanges is possible by using GSQA®, a SaaS (Software as a Service) program offered by EMNS, operating in a Nuclear Industry-rated data center. The system prevents direct suppliers access to your internal systems, providing the security of a “safe neighborhood” and securing the flow of critical data from your complex network of suppliers.