Ask the Experts: Supply Chain Disruptions are Making It Hard to Manage Inventory. But are There Certain Tools or Tactics That Could Make It Easier?
Three decision-makers share how they have executed global supply planning by leaning more heavily into a few select technologies and collaborating with people who you might never expect to be involved in these types of decisions.
In January, I had a very honest conversation with Zebra’s global supply chain leaders about the reality of their roles in this turbulent time. Like their counterparts at other manufacturing and distribution organizations, they have been heads down for nearly two years, troubleshooting global market issues that impact production and fulfillment operations. It’s quite remarkable how many fires they have put out and even more impressive how many they have prevented. Despite their lack of predictive capabilities, their proactive planning and prescriptive actions have worked exceptionally well in sustaining Zebra’s supply chain, even as new crises and disruptions emerge around the world.
In fact, the Zebra Supply Chain Technical Operations team just received a 2022 Manufacturing Leadership Council Award for its outstanding achievement in the category of Enterprise Integration and Technology. It was honored for leading the adoption of Industry 4.0 with Zebra’s manufacturing suppliers globally after spearheading a futuristic, digitized vision of manufacturing to drive efficiency. Through the deployment of innovative manufacturing process solutions, increased real-time data capture, visibility, reporting, and predictive and prescriptive analytics, our suppliers’ operations – and therefore, our operations – have become more automated, digitally connected, intelligent, flexible and sustainable.
That’s why I asked Mike Hafner, Deanna Self and Kim Segel to come back once again to share more insights:
Rob: Given how dynamic supply and demand have been lately, many are asking what Zebra is doing to keep inventory flowing to market. I know that’s a tough question because we have certainly hit some roadblocks in this regard, and we can’t claim that our execution has been flawless. But I also know that each of you has kept the ship upright thus far. Can you talk about any best practices you’re applying?
Mike Hafner, Vice President of Global Outsourcing: We consider the impact on customers and partners first in every decision. Regardless of our titles or departments, every single person’s job is to ensure Zebra can deliver the technology solutions they need to solve supply chain, inventory or labor issues and keep their businesses running smoothly. Strategically, there are several ways that we work to secure components and sustain production and inventory, as there isn’t a single best way to navigate the situation we’re all in.
For example, we often ask our business unit leaders and even our C-suite executives to engage with suppliers. As noted in a previous conversation, supplier relationships are key to operational continuity, and strategic executive engagements are key to maintaining those relationships. Of course, we’re not calling them in every time we run into a hiccup with sourcing. We escalate based on severity. But we are not waiting until it’s full crisis mode to get executives involved in the conversation with suppliers, either. We operate from a “no surprises” mindset when managing up and managing supplier relationships.
We have also learned to be extremely flexible in our sourcing strategies. For example, we’ve entered into long-term, pre-buy and non-cancellable contracts and signed memorandums of understanding (MOU) to secure the components we need. And we’re multi-sourcing when it makes sense. Longer term commitments to component level inventories are necessary to provide visibility and to gain prioritization. Even if the market slows down, we know we’ll use the components at some point because of how we manage our portfolio and project sell-through rates during solution lifecycles.
We will also look to the secondary market for components when needed and offer to assume contracts/shipments from other companies that may no longer need the parts covered by their non-cancellable agreements with suppliers. Of course, it’s not always possible to get preferred components or products – even with escalations, executive engagements, contract flexibility and secondary market searches. So, we’ve found ourselves reconsidering and certifying alternative components that won’t compromise the quality, performance, or longevity of solutions. As we have redesigned products, our Engineering and Quality Teams always ensure we maintain the high level of quality and integrity we’re known for, as we won’t compromise performance.
Deanna Self, Director of Operations, North America and Latin America + Zebra4Zebra: Flexibility as a best practice also applies to other fulfillment actions, such as shipping. If your preferred carrier doesn’t have capacity or your normal route is logjammed for some reason, consider – and leverage – other options. The situation is so fluid, those who remain rigid in their strategies and execution risk falling behind even further. That’s why we never let our foot of the gas in terms of production, fulfillment or operational overhauls. We’re constantly innovating.
Kim Segel, Director of Global Transportation: Like everyone else, we have found it hard to secure safety stock. So, we’ve been evaluating other ways to right-size inventory around the world and avoid unnecessary delays. We’ve looked at how we can cross-dock or direct ship to avoid bringing product into our DCs to save a few days, as mentioned in our last discussion. We’ve also looked for new ways to track our critical shipments and implemented solutions such as FourKites to gain a single source of truth.
Rob: Let’s talk about FourKites a bit more. Zebra Ventures has been investing in the company for a couple years now, but we’ve just recently started using the platform, correct?
Kim: Yes, we started rolling it out in January 2021 and today there are approximately 150 team members utilizing the platform across order management, regional planning, global DC operations and logistics teams. We’re using it to offer self-service tracking and updates to our internal and external key stakeholders, which enables our logistics and transportation teams to focus on other areas of our business. We’re also leveraging FourKites to monitor and measure carrier and shipping lane performance to make real-time decisions or corrective actions. In the future, we plan to use these predictive ETAs to negotiate future committed transit times with our transportation partners, communicate delivery dates to our channel partners with improved accuracy, and further refine our freight expense accruals and future freight cost simulations.
Rob: Mike, I heard you say recently that visibility has been key to sustaining operations. Were you talking about the insights FourKites provides?
Mike: FourKites has certainly been a beneficial contributor to our planning and decision-making, especially at a finished goods level. It’s what helps us track, monitor, and prioritize once the goods are built. However, our custom-configured supplier collaboration tool is what I was referring to in that discussion. It has been critical to maintaining visibility into pre-production and production workflows and resources and ultimately making decisions that help ensure we have enough goods to flow out to the channel and eventually customers.
Rob: Has the supplier collaboration tool enabled you to better mitigate or manage issues in real time?
Mike: When we see a bunch of open purchase orders in the system – and we're tracking those like hawks into the factory – the first thing we ask is, “How can we get them through the process and on their way into FourKites as quickly as possible?” Meaning, how do we pull them through to completion so we can convert those line items into finished goods tracked in FourKites. We also have a part shortage management module, which is the tipping point for intense interventions. If we see there’s a part that won’t arrive on time, we start looking for alternative ways to get it in time. This is when we really start to use our escalation tactics, find ways to escalate sourcing or shipping, and search in the secondary markets if needed. In some cases, we look for alternatives and, if there aren't any, then we escalate to engineering to see what suggestions they can offer to ensure product still makes it to market. It is a very collaborative process across multiple teams and organizations, not just between my team and suppliers.
Rob: The rate of innovation has increased in recent months as supply chain challenges have become more numerous and complex. From your perspective, though, what does innovation really mean in today’s market? Is it a large-scale system overhaul many people correlate with that term? Introducing robots, machine vision and other automation tools? Or simply finding new ways to leverage the resources at your disposal?
Deanna: I see it as a combination of all of that. I mentioned previously that we’re looking at all opportunities, both large and small. Robotic process automation (RPA), lean continuous improvement in processes, deployment of fixed industrial scanning, and 2D barcode scans that reduce workload by increments. These are quick wins, so we are working on them all the time. We’ve also deployed Fetch autonomous mobile robots (AMR) in multiple facilities. We balance these initiatives against our medium and longer-term projects like enabling new warehouse management system (WMS) functionality such as directed put away and on-site cross-docking, converting our on-premise WMS to the cloud, and deploying a more adaptive and operations-centric workforce management tool that will allow us to rethink shifts and worker flexibility.
If you missed the first conversation with these supply chain experts, you can check it out here:
You may also find these other insights helpful:
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