Managing a Global Supply Chain in a "Flat" World

One high-tech manufacturer's quest to deliver near-perfect fill rates across its global service organization

Writer Tom Friedman has asserted that "the world is flat," but for companies operating globally and facing unique challenges in each of the markets where they have suppliers or customers, the world is as round as ever. But rather than viewing regional differences as an obstacle to an effective supply chain, innovative companies are embracing the idea of centrally managing disparately structured operations that have been "localized" to take account of the particular environment in a given geography.

Case in point: Network Appliance (NetApp), the Sunnyvale, Calif.-based manufacturer of data storage solutions for large data centers. The 14-year-old company has more than 5,000 employees in 110 offices worldwide, and it generates about $2 billion in annual revenues.

Earlier this year, Bruce Shadmehri, director of global field operations for NetApp, spoke at the Interlog conference regarding his company's six-year-old field service initiative, which has helped NetApp deliver consistent 99.5 percent global fill rates across its service organization. One component of this initiative has involved establishing regionally specific infrastructures to support customers in different geographies, but running the operation with the help of a single planning system.

Due to the vital nature of its customers' data centers, NetApp offers two- and four-hour and next-business day delivery commitments on more than 1,500 parts to keep those centers up and running. "Our products are used in mission-critical applications, and customers stand to lose hundreds of thousands of dollars if there is ever downtime," Shadmehri noted in his presentation. NetApp's field service operation includes one global distribution center serving five regions worldwide through four regional hubs (in Louisville, Ky., Miami, Amsterdam and Singapore) and 200 forward stocking locations (FSLs).

Naturally, beyond meeting its customer commitments, NetApp also has an interest in minimizing the inventory that it needs to hold in those stocking locations, and accomplishing this requires a tight linkage between the stocking model and customer entitlements, according to Shadmehri. That, in turn, requires detailed mapping of the company's installed based to its FSL; the ability to manage criticality and ranking settings by customer, part, product and location; accurate parts usage data; and, in Shadmehri's words, a robust spares planning system.

The planning solution that NetApp uses, from Baxter Planning Systems of Austin, Texas, can automatically map different response codes to different stocking locations, so the company can ensure that a replacement part comes from the most appropriate location