Information overload scares the wits out of many OEMs. While the Internet promises access to a wealth of data, searching for that golden nugget to gain insight into products on allocation or alternatives for discontinued components has become a challenge.
Conventional wisdom says information makes all the difference when trying to reduce time-to-market. But it's finding the right information that has OEMs mining for data, according to James Marshall, logistics manager at Mars Electronics Inc., West Chester, Pa.
"In today's marketplace, we're all desperate for the correct information," he said. "We've been sold on the fact the supply chain is a competitive weapon, and if it's a competitive weapon, the information should be proprietary."
All companies want better information than their competitors. Faster access to more accurate information gives OEMs like Mars the competitive advantage they need to reduce lead times from nine weeks to less than two.
"I think we all have [a] secret agenda hidden in our hearts," Marshall said. "We all want to be successful in the competitive marketplace. That's why we turn to a service provider like Avnet to say you better provide me with some intelligence that your noncustomers aren't getting, because this information will give me the competitive edge. We all would be lying if we said we didn't think about it."
But managing the supply chain is about more than accessing the right data-it's knowing how to use the information that counts, according to Robin Gray Jr., executive vice president at the National Electronic Distribution Association (NEDA), Alpharetta, Ga.
"The Internet has made information readily available; in fact, it has provided an overload," Gray said. "Information by itself is really just data ... you need knowledge to go along. You also need someone to sift through the data to get the right consistency of information."
Supply-chain management tools make information all the more valuable to OEMs. Accurate supplier forecasting is crucial, and the pressure is on distributors like Avnet Inc., Phoenix, to build a direct pipeline to the manufacturer to keep OEMs up to date on issues such as production, new products, obsolescence, lead times, and capacity. Avnet's Integrated Materials Services aims to do all that and, in addition, inform OEMs what alternatives are available if a part goes into allocation or is reaching end of life.
"I don't know if I can put a dollar or cent value on bytes or bits of information, but we struggle with a fragmented supply chain and the intellectual-property rights to the information," said Steven Cassady, director of the external operations network supply solutions group at Lucent Technologies Inc., Allentown, Pa. "There's a lot of companies that can provide the service of information flow and exchange by updating you with a current physical-flow profile, but the historical trail of the transaction is typically a repository of value-add services."
Behind the scenes, Bell Microproducts Inc., San Jose, is working overtime to integrate features into PartnerNet.com, its customer Web site. Although still a few months away from a full-scale launch, the system will automatically send end-of-life notifications to customers and provide historical data similar to systems implemented by Pioneer-Standard Electronics Inc. and other distributors.
To increase communication and visibility up and down the supply chain, last January Bell began integrating an i2 Technologies supply-chain management tool, launching the system approximately five months ago. The distributor now can view production from the supplier to the manufacturing process, and has gained a better understanding of what it should be buying, the state of its bonded inventories, and what products are moving fastest.
Since the i2 launch, Bell said its turns have already increased between one-half and a full turn, and the company is confident it will soon increase that rate to two or three turns.
"Several of our suppliers are not live on i2 yet, but we can see their inventory, and we're working with some of them to complete the chain," said Don Bell, the distributor's president and chief executive. "However, we're connected with them via an extranet where we can actually view product availability. In some cases, we can pass the customer directly through to the supplier to give them visibility into their order and the supplier's available inventory."
As supply-chain management becomes more sophisticated, it's important to have a system in place that can drive demand forecasts, according to industry executives. The system must provide the ability to view all sources participating in the chain to make sure the OEM gets the right product at the perfect time.
At a time when OEMs are questioning how well the Web really works, distributors such as Avnet, Bell, and Pioneer-Standard are gambling big that it can. All three distributors offer customizable sites by job function to deliver information based on specific needs. Cleveland-based Pioneer-Standard, for instance, has a personalized customer Web site, mypioneer.com, that enables customers to tailor their information feeds.
"Instead of having a plethora of data thrown at customers, the theory is to take away information they don't want in exchange for information they do," said Walter York, the company's vice president of marketing communications. "Purchasing managers or agents have a little different view than engineers or engineering managers, so we [help them] create a work-flow process that customers can personalize."