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Many of these component manufactures sell to OEMs that outsource production to contract manufacturers often multiple contractors in multiple locations. A component manufacturer selling to five OEMs, each with five manufacturing partners with five manufacturing facilities, must support 125 different manufacturing sites. That means 125 forecasts coming in each week, Frazier points out. Without major investments in people, systems, and infrastructure, this is a very difficult model for most component manufacturers to support. Often, OEMs or EMS providers develop the master plan for a collaborative relationship a plan that optimizes their own benefits. Suppliers are expected to provide value-added services as the cost of continuing to do business. Yet, if you expect your suppliers to provide additional services and to take on additional risk at no additional cost to you, your chances of getting them on board are small. And even if you do succeed in getting them to sign up, you may find that they re unable to meet the requirements you ve set for them. Instead, work closely with your partners to develop a value proposition they can understand and buy into. Create an agreement that fairly values the added services you want them to provide and pay them an appropriate premium. Successful collaborators make a major effort to bring their partners up to speed. Some of the best practices involved in offering a compromise include providing a technology solution to them at little or no cost and working closely to get them up to speed with any new technology. Purchasing a license and having it installed at your supplier, however, is not collaboration. Finally, be sure to set up a way to monitor the results of your collaborative relationships. Work with your partners to establish a set of metrics that is consistent with the value proposition and can be updated and reviewed on a regular basis.
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NEXT-GENERATION COLLABORATION
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A critical aspect of collaboration is the need to capture and react to changes in a partner s planning data. Most of today s collaboration tools are built on centralized databases. Since it can take hours to assimilate and process data collected from numerous sources, companies often make decisions based on historical data. If you re an international company with headquarters in the United States, that might be where you keep your central database. The tools need the data to be centralized in order to do global analysis otherwise, they are just optimizing local information. To
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CHAPTER 4 Core Discipline 4: Build the Right Collaborative Model
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get the data into the database, they have to be piped in from all over the world, which can take several hours. Thus, even though you think that you can run real-time analysis, you can t. This is the reason companies run their analysis using information from yesterday (or earlier). Before centralized databases, analysis took a lot less time but was suboptimal because it only used a portion of the available data. The next generation of collaboration takes us back to the future to the late 1990s, before the bubble burst, when Internet technology promised complete visibility of operational information across the entire supply chain network. In many ways the future is already here. Most of the technology needed for end-to-end visibility already exists and has for some time. However, you can t fully leverage this technology until In the next the process maturity at your organization generation of supply catches up. Most companies are not there chain collaboration, yet, but they re getting there fast. In the next generation of supply chain technology collaboration, technology advances will be overshadowed by changes in individual atti- advances will be tudes. There ll be an evolution toward col- overshadowed by laboration as a joint investment rather than the more one-sided, if we build it, we can changes in individual make them use it attitude that charac- attitudes. terizes many of today s collaborative efforts. Changes will include the following:
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Companies will focus on collaborating to achieve long-term customer satisfaction rather than internal cost reductions. Distributed data architecture will become the most common platform for collaboration tools, allowing companies to respond in real time to planning and execution data. Companies will explore the security policies of their collaboration partners more closely, and new technologies will enable in-depth electronic audits of security provisions. True integration among disparate systems will become a reality, allowing companies to monitor all their production and logistics assets from a central system. Instead of simply automating routine transactions, systems will be able to look ahead, predict unplanned events, and trigger the correct response as needed.
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