The Importance of Building a Strong Supply Chain in Product Design

Before 2020, “supply chain” was not a part of the average person’s vocabulary. However, with the widespread disruptions caused by COVID-19, it was catapulted into public focus. Businesses are now increasing the strength of their supply chain—the ability of the supply chain to withstand unforeseen circumstances like workforce shortages or sanctions on imports.

Challenges of Assembling a Global Supply Chain

One of the most effective ways to build a resilient supply chain is through globalisation. Global supply chains will be able to better withstand disruptions, as they have access to various geographic regions and suppliers. If supplies from one region become scarce, other options are still available.

On the other side of the coin, having a global network also means there is simply more to manage. Sourcing from overseas requires additional forecasting and planning for longer lead times on components than there are for parts sourced domestically.

Having components sourced from around the world makes your supply chain more susceptible to disruptions, though these risks can be managed with early planning, buying, and diversified sourcing.

Key Factors to Building a Strong Supply Chain

Supply chain failure happens when teams have not prepared for potential problems. One common pitfall is becoming overly reliant on a single supplier, which can lead to significant issues if that supplier faces a shortage or other unforeseen challenges, such as natural disasters, geopolitical events, or factory delays.

There’s not just one way to protect against disruptions. Varying suppliers, building relationships with them, and AI all play a role in contingency planning and help companies avoid delays.

Risk Assessment and Management

All supply chains must deal with an inherent amount of risk. Surprise shortages, changing geopolitical situations and natural disasters can all hinder the product development process. Companies can manage this risk by globalising their network so they can pivot to another option if one channel is affected.

For companies without a global supply chain network, choosing a partner with supply chain teams in multiple geographical locations allows you to get products to market faster and at a lower cost since they have access and relationships with suppliers around the globe.

Component Diversification

Another benefit of global supply chains is access to various suppliers. Having suppliers in different geographic regions lowers risk and allows for a range of component options at the best price and quality. Pivot International has supply chain teams in the UK, Asia, and the US, which increases parts availability and reduces costs for our partners.

Beyond having global teams, it is also essential to build relationships. An open line of communication with suppliers improves response times when adjustments are needed. It also helps with risk mitigation, as suppliers are the first to know about component shortages or manufacturing issues and convey these messages to supply chain managers.

Plan for Parts Obsolescence

A resilient supply chain can avoid sizable gaps in production even as changes are made to products’ makeup. One part of this is having a network of suppliers that can quickly step in if a component suddenly becomes unavailable. The other is planning for parts obsolescence and end-of-life components. Eventually, components will cease to be manufactured or fall behind new technology. It is up to the product designers and supply chain team to redesign and source for new components before parts obsolescence is reached.

Transparency

Transparency in all aspects of development is key to achieving success. Technology can track progress and report data to stakeholders in real time, giving updates on inventory levels, parts obsolescence, and production status.

Embrace AI

Technology is rapidly advancing in the era of Industry 4.0, and AI is at the forefront.

AI can easily integrate all parts of the supply chain process, from information regarding product development to component life cycles and procurement.

Supply chain management platforms that use AI can sense bottlenecks, predict potential disruptions, and conduct product lifecycle management. At Pivot, we use an early warning alert system to identify possible disruptions before they affect manufacturing capability.

Inventory management systems balance inventory to avoid excess or limited inventory levels. These systems track storage space and save money by knowing exactly how much supply to have.

Beyond tracking and forecasting, AI can also run analytics, which can be used to optimise processes or recommend various solutions for a given problem. Our analytics system supports our decision-making, optimises inventory levels, and streamlines operations.

AI saves businesses time and money. Though more tasks are now being entrusted to technology, having strong supply chain teams is still necessary. Computers cannot replicate the communication necessary between product designers, supply chain managers, and suppliers. Furthermore, more countries are enacting regulations to protect jobs from being taken by AI.

Other Considerations

As the world becomes more digitised, cyber threats, such as hackers and data breaches, have also increased. Invest in cybersecurity software and train employees on best practices to prevent your company from becoming a target.

While not necessarily essential to creating a resilient supply chain, sustainability is also important when building a supply chain network. Consumer demand is increasing for sustainably made products. Sustainability regulations have already been enacted in some parts of the world, and we can expect to see increased regulation in the future. Companies planning ahead can implement sustainable practices now.

AI is the gateway to building a resilient supply chain. It can’t globalise your reach, but the analytics, early warning system, and forecasting capabilities are all facets of a resilient supply chain.

Building or fortifying your supply chain network takes time and money. Working with a partner that has an established global supply chain gives you access to their relationships and expertise and improves time to market.

Pivot UK has over 50 years of experience bringing products from concept to market. As the European headquarters of Pivot International, we have supply chain teams located around the world. Our teams are experts in import and export control, simplifying global shipments. We also provide our partners with visibility into all aspects of the process, including suppliers, contract manufacturing, transport, and third-party logistics. Contact our team today to learn more about how Pivot can bring your product to market.