In supply chain management today, it is widely accepted that effective upstream operations drive efficiency further down the supply chain — take, for instance, the degree to which suppliers are beginning to help customers reduce supply chain volatility through strategies such as vendor-managed inventories (VMI) and collaborative planning, forecasting and replenishment (CPFR). Now, imagine taking a step even further upstream in the production process — not just to the supplier of the product's components, but to the supplier of the product's initial concept — the product development team (PDT). IBM's Design for Supply Chain (DfSC) program extends the idea of end-to-end collaboration a step forward by taking a step backward and optimizing production before it even begins. By applying a product lifecycle management mentality as early on as the conceptual design stage, a product can be developed from the ground up to be a truly supply-chain-efficient creation.
Design for Supply Chain is the process of optimizing the fit between supply chain capabilities and product designs. It creates product configurations that address infrastructure limitations and use supply chain capabilities as they evolve throughout the life of the product. In today's supply chain, minimal component costs are still a competitive weapon, but the supply chain that can offer the highest performance at the lowest overall cost is rapidly becoming a far more valuable and sustainable differentiator. DfSC uses a series of supply chain management processes and techniques that increase customer satisfaction, minimize total costs, and maximize the flexibility to address unplanned events. It is the convergence of some of today's most innovative practices in the product design and supply chain processes. It can be the answer to the question, "How do we stay competitive in an increasingly commoditized market?" It is also quite possibly the next big step in product development.
However, this is no small task. With rigorous financial requirements, as well as a plethora of customer demands to bear in mind, PDT's are often already overwhelmed with product design considerations. But, by examining the nine key strategies behind DfSC, and answering the basic what, where, when, why and how of DfSC, we can help educate PDT's, and ourselves, on how to design our products for supply chain efficiency. These strategies help a PDT manage the development and support of complex products and services throughout the entire lifecycle, from product design to product build to post-sale service.
While there are challenges to implementing Design for Supply Chain, there are also evolving business means to support this type of integrated process. One such technology is service-oriented architecture (SOA), in which the many parts that IT infrastructure needs to operate this kind of process can be linked to support all of the interrelated functions involved. Those who deploy DfSC techniques should consider all end-to-end factors within their business that can help or hinder their success. Organizational culture, IT systems and information availability are all things to consider when embarking on this journey to improve not only the way your company designs new products but also to save cost and improve flexibility in your supply chain from end to end.