The cost of managing risk can’t be allowed to outweigh the value of the supply chain, says Joe McBeth, vice president, supply chain, at Jabil. But there are unknowns that have to be planned for.
As one of the largest manufacturing service providers in the world, Jabil is involved in everything from full product design, logistics, assembly and supply chain services for some of the biggest businesses around. That guarantees complexity to contend with.
"The challenges are consistent with some of the things we’ve seen in past, but they are more dramatic than they were" says McBeth. "The complexity of globalization, the number of nodes, the number of suppliers, the number of customers in the industries we serve, they all add a large amount of complexity to the equation."
Added to that are the unknowns like the tsunami and earthquake combo that disrupted so many supply chains last year in Japan.
With a title like vice president of supply chain, McBeth is understandably a bit biased in assessing the importance of supply chain management. It’s simply the "the most important competitive advantage" that Jabil has in its space, in his view. He acknowledges that that arena is filled with good players. Everyone is working from small margins, and it’s difficult to stand out or to be unique. McBeth feels that Jabil is just that because quite aside from its product offering, its supply chain excellence "does create some separation" from the competition.
To have that kind of world-class supply chain, it’s imperative to have a data system and tool set that allow one to manage the complexity that happens daily. "The guy with the best information is always going to win," McBeth says.
That’s no mere academic concern for Jabil. The manufacturer has 12,000 active suppliers and more than 250 major accounts. One needs a dependable data tool to plan and understand risk in order to keep ahead of the curve in that complex environment, he says. Sometimes you develop your own supply chain, sometimes you inherit one. Nevertheless, in all cases one needs to comprehend the risks around the master schedule and how to commit to customers’ demand signals. That necessity drove Jabil to invest in the RapidResponse solution from Kinaxis, McBeth says.
"We needed a tool set that was fast, that was easy to use and could do multiple scenarios so that we come out with better answers."
As the company expands around the world, the supply chain needs to be continually reconfigured to support the additional manufacturing sites. "Having a control tower that feeds the best information, that does the modeling — that will allow us to be ahead of the game, to lower our risk, lower our costs and produce greater value for the end customer," McBeth says.
It’s important to have tool that indicates course corrections that must be made. But McBeth says he envisions a tool one day that won’t just respond to changes but will anticipate them and take proactive measures.
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Originally posted by lsmith at http://blog.kinaxis.com/2012/02/turning-supply-chain-risk-into-opportunity-at-jabil/