FEBRUARY 2016MANUFACTURINGTECHNOLOGYINSIGHTS.COM8In a relatively short time, the Internet has evolved from a convenience into an indispensable productivity tool. From Banking and Retail to Engineering and Manufacturing, the effects of instant information access have forever changed the way products are manufactured, marketed, and sold. Yet, despite its impact, it is safe to say that we are witnessing just the beginning of what is a new era in how information will impact the way we work. The Global Supply ChainSupply chains vary greatly in terms of size and sophistication. Regardless of scope or complexity, a common thread is the need to coordinate production schedules, manufacturing resources, and the disparate planning and production systems found throughout. As the number of OEM subcontractors for parts and assemblies expands, the challenges are multiplied exponentially. For large manufacturers, many of whom have grown through acquisition, managing a hugely distributed supply chain comprised of sites, subcontractors, and raw material sources is a lot like herding cats. Little wonder that most OEM's have no visibility or control beyond what happens at their Tier 1 suppliers. This leaves them vulnerable to a plethora of potential disruptions originating at lower tiers of the supply chain (tiers 2, 3, 4, etc.) and without the ability to track progress, pinpoint costs, or effectively measure supplier performance.Fortunately, powerful yet practical collaboration technologies have emerged leveraging the widespread infrastructure and collective intelligence of the world-wide web. As a result, manufacturers are now able to transform extended supply chains into an integrated, synergized global enterprise. While the press likes to fawn on Apple or Tesla for their design prowess, an equally impressive story is how these darlings of American enterprise and innovation are using collaboration platforms to choreograph and synchronize every node in their extended supply chains. For these companies, included less obvious players like John Deere and Boeing, web-based collaborative platforms are a secret weapon that, in true "Survivor" fashion, is enabling them to outwit, outperform and outlast the competition. The implication is that because of collaborative platforms, companies no longer compete against companies, supply chains now compete against supply chains.Real ResultsFor manufacturers there are enormous advantages to be gained from having an agile, transparent and accountable raw material supply chain. Multiple studies (by Gartner, Capgemeni and others) show that on average, as much as 30 percent to 60 percent of most OEMs' manufacturing costs can be attributed directly to the purchase of material-inputs for production. Surprisingly, very few manufacturers can tell you exactly how much steel, aluminum, plastic or other material is in that excavator, railcar, truck, ship, or airplane. This is because a growing number of components and sub-systems are provided by Tier 1 suppliers; many of whom have, in turn, outsourced components to their sub-tier suppliers. The benefit of knowing just how much steel is in the excavator, tractor, or other piece of equipment, and cutting a deal with one or a few preferred raw material suppliers is obvious. There is a volume pricing benefit for sure, often in the 3-17 Managing the Extended Supply Chain Using Cloud Based Collaborative PlatformsBy Trevor Stansbury, President, Supply DynamicsIn My OpinionTrevor Stansbury
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