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2022 supply chain recap – expert ramblings from “boots on the ground” experiences

It's always important to take a look back before moving forward. Doing this keeps us from that brain fog thing of wondering why we walked into the kitchen for the third time in a row and still forget to turn off the oven. In 2022 there was a lot, and even though 2020 and 2021 seemed like they morphed together to make one extra-long, exceptionally insane, and challenging year, 2022 felt like an extension of that in many ways. I'd liken it to a roller-coaster (and I mean the kind of broken down, roller-coaster at an abandoned amusement park with monsters chasing it, ala Scooby Doo) with the non-stop events, war, more covid and health issues, insane weather, strikes, raw material shortages, price jumps and still fearful of those murder hornets. Before Covid, when a random person would ask what I did for a living, and I said supply chain software for automotive, aerospace, and complex manufacturing, I'd immediately see their eyes glaze over and then dart around looking for a quick exit. Supply chain sounded boring or too complex, and even more, the software for it. "Kind of a specialty," I'd remark and smile to myself, as the average person had no idea just what pressure went into the day of a buyer or supplier in supply chain. Supply chains take center stageThen Covid hit, and supply chain was now a household term. Suddenly, I felt like I was in that 1979 EF Hutton TV commercial, except for the supply chain. People actually wanted to listen about supply chain software. In fact, I'd find myself engaged in long conversations about supply chain matters and essentially saving the world. Even my kids were talking about it. Especially when I'd come home from grocery shopping and I'd turn up with their favorite food or snack requests missing from the grocery store run. Topics would range from worker shortages, safety, illness, raw materials, strikes, printed packaging, inks, crops, and transportation, to name a few. I'd explain what I already knew and then try to figure out what exactly was going on.As a dabbler in creative writing, I couldn't even make some of this stuff up. It was sometimes perplexing why some things just went missing for months and not others. But we muddled through like everyone else; people and companies got creative and resourceful. It was impressive to watch it unfold. By the end of 2022, even with all the chaos, things started to feel normal-ish again, and the world opened up further. Companies needed solutions, and my calendar was booked up for introductions and demos. Supply chain was up front and center now. By fall, I was also able to attend quite a few sold-out industry conferences as well. Speakers, experts, and attendees clamored; we had all been cooped up for way too long and needed desperately to connect the way we used to. We had a thirst for more knowledge about the state of supply chains and thoughts on the future. The vibes were much more different; it was high energy, focused, with a scent of desperation for real change. From meetings with prospective customers, customers, and industry conferences, what was once a mere "pie in the sky" wish of real supply chain collaboration was now, even more, a much-needed reality. We needed to propel supply chain management into the future, not just to be efficient and manageable but to sustain the lives of companies.2022 needs recapResiliency"Resiliency" is a term that has been tossed around before the pandemic, but in 2022 I found it to be the theme of the year when it comes to supply chain. However, resiliency doesn't necessarily mean the same thing for everyone. The list goes on: strong supply chain, access to inventory, reduced costs, backup suppliers, and insight into trends, issues, and challenges. So, what does it mean to have a "resilient supply chain" to you? TransparencyEven before the global pandemic, supply chains were volatile. In the complex manufacturing world, buyers/planners would forecast and put their orders into suppliers around the globe, and suppliers would accept them. For automotive and aerospace, that could be a year-plus lead time or even longer. Until the promise date arrives and there are no parts, or perhaps if an advance ship notification (ASN) is generated, there is literally no status on the supplies that are ordered. When a part is missing or late, chaos ensues, right? Things like production shutdown can occur, late orders, and essentially, ultimately, affect the bottom line. VisibilityOne of the biggest things I heard over and over again at conferences and from prospects was having greater "visibility" into their supply chains all the way to tier N. The statement, "we don't know who our suppliers are, " became a constant concern. Of course, the goal is to plan better, and especially OEMs and top-tier suppliers want the ability to know things even before their suppliers do in order to plan better and make informed proactive decisions. SustainabilityI remember when sustainability was the buzzword back in the 90s. I worked on quite a few sustainability statements for customers. Everyone seemed to have a goal about sustainability by the year 2020. That came and went, and the global pandemic made us go backward on this initiative, more disposable everything, personal protective eqipment (PPE), shortages, expedited orders, and transit. After all this, we are trying to get back on course to reduce our carbon footprint while being profitable. Stay tuned for more tips, tricks, ideas, and ramblings.

SCM Insights

Four steps to get a grip on key requirements of the Supply Chain Act

On January 1, 2023, the so-called Act on Corporate Due Diligence Obligations in Supply Chains — known in common language as the Supply Chain Act — will come into force in Germany. Oliver, you have been dealing with this topic for quite some time. What is your impression? Are the companies that are affected by it well prepared for it?Initially, the law only affects large companies with more than 3,000 employees in Germany. My impression is that many of these companies are dealing with the issue but have not yet taken all the precautions to be able to fulfill the required due diligence.Just one year later, on January 1, 2024, even smaller companies with 1,000 or more employees will be affected. Even if this deadline still seems a long way off, there will be an urgent need for action from mid-2023 at the latest.What needs to be done in concrete terms?The law obliges companies to exercise due diligence with regard to the protection of human rights and the environment — and in particular with regard to their supply chains. This includes, for example, the protection of children, fair working conditions, environmental protection measures to ensure the health of workers — to name the most important aspects.To begin with, this means that companies must take a very close look at their supply chain and ensure maximum transparency: How, where and under what conditions do my suppliers produce? At which of my suppliers' production sites is there a risk of human rights being disregarded? And so on. Then they must work with critical suppliers to minimize their risk potential.Creating transparency in the supply chainThat sounds like a lot of work, which certainly creates major challenges for companies.That's true — but the good news is: there are established tools that can be used to digitize and automate these processes. If we take SupplyOn's solutions, they all essentially aim to create maximum transparency in the supply chain. This starts with master data, which can be easily maintained and updated via SupplyOn and is centrally available to the entire organization. It continues with action plans, which can be created and processed online, and extends to comprehensive risk management, which can be implemented via SupplyOn by incorporating external and internal data sources.Tools are one aspect — but how does a company integrate its suppliers into this process without having to invest an extremely large amount of time and effort?SupplyOn offers the advantage of an enormously large active supplier network, consisting of over 140,000 companies worldwide. Numerous data are already available here in the highest quality. Suppliers only need to update their data in one place. In the end, everyone involved benefits from this.The four-step approachWhat would be a pragmatic approach, in other words, what would you specifically recommend to a company — and how can SupplyOn support it?I recommend approaching the subject in digestible "bites" step by step, as follows:Step 1Create transparency in the existing supplier base: The SupplyOn Business Directory in combination with the Flexible Survey offers the possibility to make an inquiry among the suppliers. Corresponding questionnaires are already available in the system and can be used easily. The results flow automatically into the Business Directory. This sets the foundation on which to begin.Step 2Adding other aspects related to the Supply Chain Act to contracts: SupplyOn Contract Management offers contract templates that include these aspects and supports the update process for new and existing contracts.Step 3Creation of a catalog of measures to optimally support suppliers on their way to compliance regarding the Supply Chain Act: Using SupplyOn Action Management, remedial and preventive measures can be defined in coordination with the supplier and then processed in a structured and transparent manner for both parties. This ensures that agreed measures are actually anchored in the organization and that new processes are put into practice.Step 4Expand risk management and existing reporting processes to include Supply Chain Act aspects: SupplyOn offers the option of enriching an already established internal risk management system with external data in such a way that this creates an even more precise picture of the actual risk. In times of great uncertainty, this step is essential and should be the desired goal for all companies.And one final advice?Don't hesitate any longer, just start and work your way forward step by step.

Industry News

Aviation Forum 2022: A new era of aviation — sustainable, resilient, together

"A new era of aviation: Sustainable. Resilient. Together!" Under this motto, Prof. Dr. Walther from IPM welcomed around 1,900 participants and 130 exhibiting organizations to this year's Aviation Forum, now in its 12th year. Munich was the venue for the second time.The event's title set the central themes: climate-neutral aviation, a resilient supply chain amidst a renewed rise in production rates, and partnership-based collaboration between all stakeholders. All three are key success factors for mastering the challenges of the future.Goals and strategies for more sustainability, resilience and competitivenessIn his opening speech, Airbus CPO and Aviation Forum host Jürgen Westermeier highlighted his company's ambitious goals: The production of 75 A320 family aircraft per month and zero-emission flying by 2050.In her highly acclaimed presentation, Marjolaine Grange, Head of Purchasing at Safran Group, spoke about the systemic axes along which performance and competitiveness in the aerospace supply chain can be enhanced. She emphasized the importance of SupplyOn AirSupply as a collaboration standard for aerospace SCM processes. It is used by 10,000 suppliers, including currently 550 at Safran alone and 700 more planned in the future.The industry standard AirSupply is growingSupplyOn works very closely with the industry consortium BoostAeroSpace for AirSupply, making it a successful industry standard and community solution.The AirSupply community continues to grow: this year, SupplyOn joyfully welcomed new AirSupply customer MT Aerospace to its booth:Future-proof and efficientKlaus Richter, former host of the Aviation Forum and now CEO of the Diehl Foundation, spoke about what it means to bounce back after the crisis as a major Tier 1 and to prepare properly for the future.Highlights of the two-day Aviation Forum from my point of view were, besides the expert presentations, the many personal conversations at the booths, the exchange at the Gala Dinner, which has become a tradition by now, as well as the Executive Workshops with brainstorming on the supply chain of the future.Factory Tours: Aviation hands-onThe Aviation Forum concluded with the Factory Tours. Destinations for these tours included SupplyOn customers Airbus Defence & Space and Deutsche Aircraft, as well as key industry players such as MTU Aero Engines and GKN Aerospace.The author was impressed by the transition at Deutsche Aircraft from a MRO provider for the Do328 to an OEM/integrator for the new D328eco. The aircraft is set to be developed and manufactured in Germany.Following the still heavily Corona-influenced 11th Aviation Forum last year, it was widely evident how important personal contacts are in an industry which is based on collaboration.The date and location for the Aviation Forum 2023 have already been set: December 5 and 6, 2023, then again in Hamburg.

SCM Insights

How to best manage geo-related risks in your supply chain

The past two years have been marked by unprecedented supply chain disruptions. It’s not just the transport routes, but also the production of goods itself that is severely impacted: New local or regional Covid lockdowns keep slowing down manufacturing, especially in Asia. The ongoing chip shortage hits more and more industries. The power outage in Texas first knocked out the local petrochemical plants in February — then, its effects swept across the entire plastics supply chain worldwide. ... The list could go on and on. (more…)

Inside

Employee’s voice: why did I return to SupplyOn?

Pinpin Qu joined SupplyOn first in 2017. After 4 years of consulting experience, she left SupplyOn and joined us again in 2021 as Client Executive. Let’s hear why she came back again:“SupplyOn is a global IT company focusing on supply chain collaboration. The company respects each individual’s personality and empowers colleagues in their career development.Work here is highly professional. SupplyOn applies cutting-edge IT trends to design proven and innovative supply chain solutions. You work with industry experts to discuss the future development of the platform. Expert Group workshops provide you with deep insights into the complex supply chain environment.SupplyOn’s customers are all global top companies, e.g. Bosch, ZF, Schaeffler, Continental, Schneider Electric, Johnson Electric, Vitesco and so on. So here, you will never stop learning.What makes working here so special is that SupplyOn cares about you and highly values female employees. Zixi Zheng, SupplyOn Asia’s leader, is a very charismatic person. As a mom of two sons, Zixi encourages women to take on more responsibilities in the office. At the same time, you are fully respected to take time for taking care of your family.If you have talents, here is your stage!" Find more jobs at SupplyOn: https://www.supplyon.com/en/career/"In implementation, SupplyOn focuses on constant innovation and refinement. We share the vision of one global supply chain platform strengthening our customers’ supply chain resilience. If you want to dedicate yourself to supply chain management, welcome to SupplyOn!"

Industry News

Aircraft Supplier Summit 2022: successful premiere at Leipzig Airport

Co-organized by the Berlin Institute Supply Chain Management, the German OEM Deutsche Aircraft hosted the first Aircraft Supplier Summit on November 15 and 16, 2022 at Leipzig Airport.Leipzig is the chosen final-assembly-line (FAL) location for the D328eco, the groundbreaking, forward-looking platform building upon the legendary Dornier Do328 aircraft, for which Deutsche Aircraft is the type certificate holder. The D328eco will rely on Sustainable Aviation Fuel (SAF) as transition to zero-emission flying. Planned by 2030, also hydrogen propulsion will be explored. The FAL construction is planned to start in 2023 already.Key topics of this summit wereHow Deutsche Aircraft and its partners shape the future of sustainable flyingCreating supply chain resilience in a VUCA* worldTechnology-enabled supplier collaborationESG* as a new mindset, towards improved sustainabilityPartnership between Deutsche Aircraft and its suppliersImproving supplier collaboration & supply chain resilienceIt is impossible to mention all the highly interesting keynotes with the all the valuable insights. Therefore, just some highlights from SupplyOn perspective:BoostAeroSpace CEO Rodolphe Péricat explained how the organization contributes to technology-enabled supplier collaboration. Building on a strong industry community, it addresses increased security needs and governs dedicated supplier collaboration platforms, including SupplyOn AirSupply.Deutsche Aircraft has chosen SupplyOn as strategic partner in order to digitally manage collaboration with suppliers and enable structured communication.ThyssenKrupp Aerospace CEO Patrick Marous shared how they foster supply chain resilience with their Supply Chain Control Tower. By considering resistance, forecast, avoidance, inventory and capacity buffers it secures the company’s ability to deliver in a VUCA world.One highlight of the summit for sure was the awarding & contract signature ceremony live on stage for two new suppliers of Deutsche Aircraft: Bucher Leichtbau from Fällanden, Switzerland, and Elbe Flugzeugwerke (EFW), Dresden. The latter is also a SupplyOn customer for AirSupply.Great forum, to be continuedThe Aircraft Supplier Summit was a unique opportunity to exchange with decision makers of Deutsche Aircraft. It was also a good forum for face-to-face discussions with strategic partners and suppliers.To wrap up, attendees were asked to provide their feedback on the event. Among the key take-ways mentioned were insights on supply chain resilience, sustainability, and technology as an enabler. But also partnership and inspiration were important attributes of the conference.The next Aircraft Supplier Summit is already scheduled: Nov 7 and 8, 2023, again in Leipzig. See you then! --*VUCA: volatility, uncertainty, complexity, ambiguity** ESG: environment, social, governance

SCM Insights

100% compliance in purchasing: from duty to high performance

As explained in my last blog article "Four steps to achieve 100% compliance in purchasing", purchasing organizations that take the topic of compliance seriously should first create a solid basis with the introduction of standardized processes and tools in order to achieve company-wide transparency and consistency in their purchasing activities. This allows mandatory topics such as avoiding bribery or maverick buying to be brought under control.Today’s world is more complexBut compliance today encompasses much more than the purely mandatory topics and has become significantly more extensive, complex and dynamic. Purchasing is ideally positioned for these new requirements thanks to its central role in the company.Examples of the new requirements are:More comprehensive risk management in the supply chainHigher requirements for IT security and data protectionNew legal requirements, which can vary greatly from country to country For example, the Supply Chain Due Diligence Act or Conflict Minerals Reporting based on the Dodd-Frank ActSanctionsFor example, in the case of violations of the human rights of UyghursConstantly increasing requirements from customers or from our own product marketingFor example, the reduction of the CO2 footprintThe good news is: to address these new challenges, you can build on solutions that are already in place. The core processes of purchasing, which are already digitized today, can be relatively easily supplemented with further needs from compliance and risk management.In this context, it is not only important that all relevant departments internally, i.e., quality assurance, logistics, product development, data and security management, compliance management, etc., are involved in the processes, but also that the results of these processes are available for strategic purchasing decisions. For this to succeed, purchasing must become active at an early stage and needs access to these other areas.Key player: the Sourcing Decision SheetAs in my last blog article, I would like to explain the practical implementation using our customer Continental Automotive as an example. Just as for the Rfx process, uniform processes and software tools were defined for the various compliance topics and made available via the SupplyOn solutions. The aim here is also to involve suppliers at an early stage and to provide them with central access via SupplyOn to maintain the necessary information.At Continental Automotive, the so-called Sourcing Decision Sheet, which forms the basis for decision-making by the Purchasing Council at Continental and which used to be based primarily on price and conditions, has been and will continue to be successively supplemented with information from the various compliance aspects. As a result, these are also automatically taken into account in the supplier selection. The decisions made by the strategic purchasing committee are in turn recorded and documented centrally in the tool.Here are some examples of data that automatically flows into Continental Automotive's Sourcing Decision Sheet from non-purchasing areas:Risk Management: Suppliers of production material must include in their bids all locations that will be relevant for the production of the requested parts. Based on their geo-location, all specified locations are automatically classified and assigned to the risk categories specified by Continental.Supplier Assessment: Performance data is already available for suppliers with whom Continental Automotive has been working for some time — both at site and commodity level.Feasibility Study: For new parts to be developed, feasibility analyses with regard to technology, quality and logistics are carried out in parallel with the sourcing process with the suppliers in question. This process is supported by the SupplyOn Technical Review service.Certificates: All suppliers are required to enter their status for standard industry certificates in the SupplyOn Business Directory. Depending on the certificate type, availability is sometimes even a mandatory prerequisite for being awarded a contract.Compliance: Adherence to guidelines and regulations can be flexibly queried from the supplier or alternatively integrated from external data sources or customer systems. All these different aspects flow into the Sourcing Decision Sheet and generate a holistic picture based on formulas and weightings that can be defined freely. Purchasing thus has a flexible and scalable tool at its disposal for effortlessly mastering all aspects relevant to procurement. This means that purchasing is well equipped not only for current challenges, but also for those of the future.Action recommendations at a glanceIn summary, here are the steps that should be followed in order to cover all aspects and achieve 100% compliance in purchasing:The dutyFirst of all, it is necessary to introduce uniform and company-wide binding core processes that are anchored in the organization via suitable tools. In this context, increasing master data quality is a very important aspect. High data quality is a prerequisite for any kind of digitization and thus a homework assignment for all organizations involved. The good news is that digitization not only requires high master data quality, but also supports and enables it.The extra mile for even higher performanceThe extra mile consists of supplementing the core aspects in the award process — i.e., price and conditions — with all aspects of a 360-degree compliance management process and integrating these into the strategic decision-making process.

Supplier Community

Supplier Community Event: relevant CO2 information for suppliers — for the first time live from the studio

Our Supplier Community Events are highly appreciated by suppliers. High attendance figures and constant positive feedback from the audience have now prompted us to give it an even more professional touch: Our new SupplyOn Studio debuted at the last Supplier Community Event — and it was a complete success! Read all about it here for yourself...Not only do we have cutting-edge equipment, but also guest speakers from Schaeffler and Continental Automotive:Prof. Dr. Florian Schupp, SVP Purchasing & SM Automotive at Schaeffler, provided deep insights into Schaeffler's climate neutrality targets in his keynote speech. He reported on the "Supplier Sustainability Innovations Automotive Europe Summit", introduced the concepts behind the action areas Green Materials, Green Production, Green Energy, as well as Green Data, and demonstrated how CO2 values influence the selection of new suppliers and thus Schaeffler's sourcing process. Also, the collaboration with existing suppliers is changing at Schaeffler as they are expected to hand over CO2 values together with the ASN (Advance Shipping Notification) in the future. In addition, certificates will be requested in order to be able to ensure that ESG* targets can be met. A 25 % reduction of Scope 3 emissions seems to be a quite ambitious, but feasible target for 2030, that builds also on the contribution of our suppliers. Therefore, the focus is on suppliers and the purchasing function to make a significant contribution to achieving the sustainability goals.Prof. Dr. Ing. Florian Schupp, SVP Purchasing & SM Automotive at Schaeffler.Insights for suppliers after the eye-opening keynote: With regard to sustainability in supply chains, there are many new aspects to consider in the future. Communication between customer and supplier will be intensified - and also this exchange between Schaeffler and its business partners will take place via SupplyOn. Corporate Carbon Footprint Readiness SurveyVeronika from Continental Automotive Purchasing took over next. In the first step, she illustrated Continental's CO2 targets and strategies. Together with Wolfgang, Director Consulting North America, from SupplyOn, she presented a joint project between Bosch, Continental, Schaeffler and Vitesco: The Corporate Carbon Footprint Readiness Survey via SupplyOn.The jointly developed questionnaire is designed to provide customers with insights into their suppliers' CO2 data.Our goal is to create 100 % carbon neutrality along our entire value chain. As a first step, we will request our suppliers to switch to 100 % renewable energy by 2030. In addition, the availability of reliable carbon footprint information on both on company as well as on product level will become essential in the future.Veronika Leutgäb, Sustainability Management at Continental Automotive Purchasing A SupplyOn PCF tool for suppliersBut we didn't just have information on corporate carbon footprint for the audience. Korbinian, Vice President Portfolio Strategy and Marketing, gave exclusive insights into the development of a new SupplyOn solution for product carbon footprints. This will help suppliers to manage and share requested data with their customers. Michael, the lead Product Owner shared specific use cases of the planned solution and encouraged attendees to participate in testing and designing it. Top 5 SupplyOn features for suppliers in 2022Saving the best for last, our trainer Regina demonstrated the top five supplier features in 2022 on the platform, click by click:Dashboard / Navigation DrawerE-Mail NotificationOrder Line Items OverviewFormat DescriptionsCertificate Management We hope that suppliers were once again able to take away valuable information - on both SupplyOn solutions and on the subject of CO2 — and we are already looking forward to the next Supplier Community Events! * ESG: Environment, Social, Governance

Industry News

Sustainability Kongress 2022: solving the challenge of sustainable business operations

The Sustainability Kongress, organized by the Berlin Institute of Supply Chain Management, was a high-profile event, with keynotes by the former Minister of Foreign Affairs of Germany and Parliamentary State Secretary in the Ministry for Economic Affairs and Climate Action. Alongside Joschka Fischer and Michael Kellner, various corporate executives and purchasing managers presented their views on sustainability in a world in transition, where time to act is running out. Among the speakers were Schaeffler CEO Klaus Rosenfeld, Deutsche Bahn CEO Dr. Richard Lutz, Airbus Executive Nicole Dreyer-Langlet and BASF Executive Saori Dubourg.Sustainable management is in demandThe key topic of the congress were sustainable business practices. Particularly, it was about the need for embedding sustainability in the corporate strategy as well as a basic attitude for the entire organization. A clear, transparent and measurable sustainability reporting system was called for.Two aspects in particular were discussed for reducing the carbon footprint. One key factor was the impact of the inbound supply chain (i.e. upstream supply chain = "Scope 3") on CO2 emissions. The second central topic was product development aligned to sustainability principles. This considers CO2 emissions both during product use and at the end of the product life cycle, catchword: circular economy.In addition, other important ESG topics, such as diversity and the need for political guidelines for sustainable business, were also discussed intensively.Award-winning sustainabilityIn three categories, the jury of the Sustainability Kongress honored the most innovative concepts, initiatives and companies among all applicants.Sustainability AwardCategory ProcurementWinner: Deutsche BahnFinalists: EnBW, MieleCategory OperationsWinner: thyssenkrupp Material ServicesFinalists: GEA, SiemensCategory R&DWinner: TE ConnectivityFinalists: Knorr-Bremse, BlueMovement BSHBuilding Public Trust AwardCategory Non-Listed CompaniesWinner: Robert BoschSupplyOn sincerely congratulates all winners and finalists, including SupplyOn customers BMW, Bosch, Deutsche Bahn and Siemens.Sustainability at SupplyOnAs the standard for supplier collaboration, SupplyOn supports its customers and their suppliers in achieving their sustainability goals. This applies in particular to Greenhouse Gas (GHG) Scope 3 topics, ranging from surveys on the Company Carbon Footprint (CCF) and the Product Carbon Footprint (PCF) to solution modules with regard to the Supply Chain Corporate Due Dilligence Act (Lieferkettensorgfaltspflichtengesetz, LkSG).

Inside

News from Visibility & Analytics, Quality Management, Supply Chain Collaboration and Invoicing

Our development teams have done a great job in the past three months. Here is a summary of the most important new features: (more…)

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