The path to Supply Chain Excellence

Recourse claims, dissatisfied customers and lost profits are just a few of the frightening things that can happen to companies that do not have their supply chain under control. An optimally designed supply chain can not only avert such damage, it can also become a real competitive advantage. But the path to Supply Chain Excellence is not an easy one; it requires reliable partners, commitment and team spirit.

Recourse claims, dissatisfied customers and lost profits are just a few of the frightening things that can happen to companies that do not have their supply chain under control. An optimally designed supply chain can not only avert such damage, it can also become a real competitive advantage. But the path to Supply Chain Excellence is not an easy one; it requires reliable partners, commitment and team spirit.


Supply Chain Management – an overview

In 2017, 71 percent of the companies surveyed by the German Federal Association for Materials Management, Purchasing and Logistics reported at least one disruption in their supply chain. At first, this sounds less critical than it is. It was also found that statistically every tenth supply interruption causes damage in excess of ten million euros. The strategy for actively avoiding such incidents is called Supply Chain Management. In the maximum extension, the consideration extends from the extraction of the raw materials to the sale of the product. The latest approaches even close the loop by including the recycling of raw materials in the analysis.

Supply chain management is therefore the answer to the many questions that customers from the private sector and industry ask companies. One of the most pressing concerns here is to ensure the short-term availability of individual products for global customers with a tendency to decline their willingness to pay. This development is forcing the industry to form increasingly complex, globally distributed value-added networks that need to be managed.


Supply Chain Management in the Aviation and Automotive Industries

Supply chain management is characterized by a particularly broad focus. Not only material, but also information and payment flows are among the objects under consideration. The aim is to find the global optimum for all organisations involved instead of limiting oneself to local optimisations. This is the only way to achieve a promising long-term positioning in the market. The design of supplier and customer processes must therefore be case-specific, and experts refer to the search for an individual strategic fit.

In high-tech industries, such as the aviation and automotive sectors, management is focusing more and more on mastering the rampant variety of variants. It is also essential to avoid expensive line downtimes due to supply bottlenecks. The headlines of recent years have shown that there is still considerable potential for optimisation in delivery reliability. In order to meet these requirements and at the same time react flexibly to customer needs, supplier networks in the automotive industry have consolidated. System suppliers who deliver modules in the sequence of the final assembly line are used in many areas. These suppliers in turn manage their upstream suppliers with the participation of the OEM. This cooperation model has also long since arrived in the aviation industry: entire cabin modules and seating systems are supplied fully assembled by the system suppliers.

As pioneers in the integration of the supply chain, automobile manufacturers are increasingly trying to integrate partners from the early stages of value creation into the cooperation. This is the only way to ensure a secure supply at the lowest possible cost. Here, too, improved forecasting accuracy, exact sequencing of products and proximity to the customer are becoming increasingly important.


Challenges for supply chains in cutting-edge technology

Quality continues to be the top priority for particularly safety-critical products in the automotive and aviation industries. At the same time, it is essential to meet the central requirements for cost-effectiveness and reliability. To resolve this conflict of objectives, the internal processes must be designed in such a way that they harmonize as well as possible with the interfaces to customers and suppliers.

Successful supply chain management therefore begins as early as the product development phase, because this is where most of the later characteristics of the supply network are fixed. Supply chain managers advise engineers, logisticians and buyers as well as the sales department throughout all phases of the product life cycle.

Suppliers should now, at the latest, decide to intensify the development of appropriate management resources and active risk management for their supply chain. This is the only way they can become a reliable and integrated partner for the OEM. Anyone who misses the opportunity to qualify accordingly will be faced with high barriers to entry later on. The further down a company is in the supply pyramid, the greater the cost pressure. Investments and the development of know-how are then difficult to finance.


Supply Chain Management: Our Expertise

ARTS works together with its customers to meet this challenge. We specialize in the optimization of complex processes with many participants and dependencies. The methodical approach using the example of a Tool Management project: In order to recognize the need for action, there is no way around recording and analyzing the current situation. For this reason, the results are recorded in the target dimensions of the degree of information exchange and compliance with defined standards.

Once the optimization potential has been identified and prioritized, the project team can proceed to the implementation phase. Our specialists deliver solutions with measurable results. In the area of Tool Management Services, for example, we manage to reduce the variety and stock of tools while maintaining tool availability. This often saves our customers up to 20 percent of their process costs.


At Airbus in Toulouse and Saint Nazaire, ARTS is responsible for 13,500 tools and items of equipment © Hero Images, Getty Images

But not only that, for our customers we also take over the operative execution of the recognized critical sub-processes. In keeping with the central idea of supply chain management, we attach particular importance to transparency, good communication and independent action. Our comprehensive references show how energetically and competently our supply chain management experts proceed. They make it clear that we can put together the right team for every task in the supply chain from our pool of experts.


Supply chain management requires team players

At the request of our partners, we take over entire processes or partial steps from purchasing, materials management, production and logistics. For example, the team already has successful projects in its portfolio at Airbus, in the course of which our experts created and operated a warehouse management system for the planned maintenance of aircraft parts or took over permanent Tool Management.

These are just a few examples of our cooperation with partners from various industries as part of Business Process Outsourcing (BPO). We support our customers on their way to Supply Chain Excellence and help them to optimally position themselves for the constantly increasing competition in the high-tech industries.


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