I interviewed Stacy (Monarko) Leidwinger who discussed Driving Visibility in Sourcing and Supplier Management.
It’s nice to speak with you today, Stacy, and today we’re looking forward to hearing your views on the topic of driving visibility in sourcing and supplier management. Can you start by providing a brief background of yourself?
Sure, Dustin, and thanks for having me today. My name is Stacy Leidwinger, and I’m the director of product management for a company called Directworks. Our focus is really helping manufacturers understand all cost elements in their sourcing activities, specifically in the area of direct materials. We also then assist in how they pick the right people for the right team as it relates to supplier management. In my role I work very closely with our customer and really understanding much of the unmet need out there with manufacturers as it relates to sourcing and supplier management.
Why should manufacturers start focusing on their upstream supply chain?
Well, specifically in the realm of upstream supply chain, there’s a need for great cost visibility, especially when you talk about direct materials. It’s all the costs that potentially go into sourcing your direct materials in order to create your component parts. Today, when I talk to many manufacturers, it’s a very hands-on, manual process; they’re using spreadsheets as they get in quote information and sourcing details. No one supplier provides the same amount of information and data, and it becomes very challenging to understand the breakdown in terms of what the raw material costs are, the labor costs. Even some of the implicit that comes as it relates to supplier risk. Really, what I’ve done with customers and manufacturers specifically is try to automate and collect that data in a way that’s global so you can drive that visibility. By driving that visibility, you now can make better decision, which ultimately allows you to increase margins, which is reducing your total cost with that visibility. It’s also helping many manufacturers introduce new products on time, with higher quality because they’re going ahead and capturing the right margins up front; they’re understanding who they’re selecting as their suppliers; and it overall helps them mitigate their risk. It’s not just a cost factor, but it’s an overall risk factor that this visibility drives for them.
And about risk, can you talk about what the key risk areas are that manufacturers face when they’re managing other suppliers?
There’s a number, depending on the industry and vertical, but at a very high level, one thing that we really help our customers and manufacturers walk away with is: How do you pick the right team to start out of the gate? And in order to manage risk, you really need to have all the information possible to make the most informed tradeoff decisions. You need to understand risk elements such as: Can your supplier meet the demand? Do they have enough capacity to actually deliver to you what products and parts and components you may need for your own assembly? You also need to go ahead and understand their past performance. Have they done the right quality checks in the past with you? Many of our customers—you know, I work with manufacturers—they look at their scorecards for their suppliers, and before they go ahead and source, they start to understand what their past performance has been, what their weak areas have been. We also can help customers really understand and segment their suppliers by value. Again, they recognize what they can do for them. What’s the best value they can provide? All of this helps reduce the overall risk of picking the wrong supplier, someone who can’t deliver the right quality, meet capacity needs, maybe goes against some of the compliance, like conflict minerals, that are out there. In order to avoid all that, you need that 360-degree view of the supplier, and we allow to capture that at a global level and always provide that view to try and prevent the risk of picking the wrong suppliers to really join your team at the end of the day.
How is technology being leveraged to drive visibility in the upstream supply chain?
As I mentioned, today many manufacturers have a very manual process. They’re actually doing a lot of their sourcing and quoting activity in spreadsheets; they’re sitting in file shares not available for everyone; engineering teams are working with part drawlings, CAD drawlings, 3D images, and all those are locked in disparate resources. The key to a technology is to really go ahead and create a single location and area where all of this rich information is stored and housed. It’s then also automating the process of how you collect that information, how you store the information, and how you analyze the information. I know Big Data gets thrown and tossed around in a lot of conversations today, but, really, that’s fundamentally what technology allows manufacturers to do by automating and standardizing that process. The other big key that I see a lot of manufacturers investing in in order to have that single view of all the information they need, that right level of visibility, is investing in integrations. The fact that, specifically for manufacturers, when you’re sourcing and handling supplier-management activity, you need data coming from perhaps your PLM systems, your ERP systems. As you collect this data, you need to be able to flow data in, interact with that information, analyze it, and then flow it out to other systems that then may require other activity within your supply chain. At the end of the day, technology really helps automate and standardize those processes, as well as ensure that manufacturers’ sourcing and supplier-management needs are fully integrated not only in their upstream supply chain, but as well as their downstream.
Do you have any final recommendations?
I think, really, my final recommendation for many manufacturers is: Look at your processes today. How automated are those processes? Start asking questions of: Can I have a global view of all my sourcing activity? Can I break down the total cost of different product lines, programs, initiatives that I have going on? If the answer is no, there’s a great chance you’re leaving money on the table throughout your sourcing activity. Your risk for supplier management may be high. It’s really time to look at those processes and understand how data’s being collected, how it’s being used in the decision-making process, and identify ways to start automating and standardizing those policies and practices. At the end of the day, there’s lots of information out there, but I think it’s key for manufacturers to start looking inwardly and understand how I use that data to really start driving action, making the right decisions for my company based on sourcing and supplier-management needs.
Thank you, Stacy, for sharing your views on driving visibility and sourcing in supplier management.
Thanks, Dustin. It’s been a great conversation.
About Chandramouli N.V
Stacy (Monarko) Leidwinger
Director of Product Management at Directworks