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Digital Supply Chain Assessment Sets Stage for Optimizing Performance

Businessman holding virtual interface panel of global logistics network distribution and transportation, Smart logistics, Innovation future of transport on large warehouse center background.
Credit: iStock/ipopba

The premise for the NIST MEP Digital Supply Chain Network project is familiar to MEP Centers — many small and medium-sized manufacturers (SMMs) are often not ready for Industry 4.0 and do not know how to implement it. Manufacturers with fewer than 50 employees often lag in digital supply chain areas such as setting cybersecurity policies and leveraging data and information analytics.

The digital supply chain in manufacturing refers to the consistent and sustainable connectivity between the manufacturer and the lowest-level suppliers to the delivery of the product to the customers. It includes capturing operational data from sensors, machines and other connected assets, but it also includes ERPs, sourcing, finance and cybersecurity. A manufacturer that efficiently manages its digital supply chain has a head start on optimizing performance with better demand forecasting and automated inventory management, improved time to market, and lower-cost sources of raw materials. Typical areas where manufacturers are seeing immediate success include:

  1. Improving bidding processes for new sales
  2. Minimizing downtime
  3. Streamlining measurement data used to maintain quality and cybersecurity
  4. Reducing energy costs
  5. Improving the flow of products, sales and revenue to support more sales
  6. Making better business decisions by using real-time information
  7. Building readiness to deal with different scenarios and build business resilience

The Massachusetts Manufacturing Extension Partnership (MassMEP) and the North Carolina Manufacturing Extension Partnership (NCMEP) have worked together to develop The Digital Supply Chain Maturity Level 1 Assessment, tools and curriculum to help SMMs address organizational issues and provide tactical approaches to the digital supply chain.

Partnership Leverages Expertise of Two MEP Centers

The partnership began with the NCMEP seeking to leverage its expertise in assessment and training development. It looked across the MEP National NetworkTM and reached out to MassMEP to tap into its cybersecurity expertise. MassMEP realized that its existing cyber training and programming could use more significant components for leadership/change management and data analytics. For example, DOD contracts require not only cyber certification but also data analytics capabilities. The two MEP Centers applied for and received a three-year Competitive Awards Program grant, which was completed at the end of September 2020.

Each brought something distinctive to the relationship — MassMEP has a strong private-sector presence in cybersecurity because of its base of defense contractors, and NCMEP has an academic-based professional learning arm. They combined their expertise to develop educational, training and communication tools for use in assessments, classes, and webinars.

MassMEP worked with private sector partners to develop an Industry 4.0 curriculum of educational products and services for these areas:

  • Cybersecurity
  • Robotics
  • 3D printing
  • Business planning and strategy for 4.0
  • IoT
  • Agile methodology
  • Augmented reality

NCMEP has built a curriculum for supply chain and analytics classes and training in addition to building out the assessment.

Digital Supply Chain Assessment Has Functional, Organizational Elements

The project leaders, Tom Andrellos of MassMEP and John Dorris of NCMEP, describe the point of departure as the decision to develop their own digital supply chain readiness assessment. There were other assessments out there, but they were too complex, or they tended to focus on manufacturing operations or cybersecurity versus the supply chain continuum.

The result, The Digital Supply Chain Maturity Level 1 Assessment, includes 16 questions and covers two dimensions:

1. Functionality, including focus areas on:

  • Cybersecurity
  • Supply chain sourcing
  • Inventory
  • Finance
  • Operations

2. Organization, including focus areas on:

  • Policy
  • Behavior
  • Learning and training

Assessments completed thus far have revealed that analytics is the functional dimension category with the lowest mean rating, and that learning represents the organizational dimension category with the lowest mean rating, suggesting that a major challenge SMMs face in the digital supply chain is training related to analytics.

Assessment Identifies Gaps, Opportunities for Building Roadmaps

The assessment is the starting point for client engagement and providing a roadmap to digital supply chain success. For example, you can see from the assessment if a company is organizationally siloed, where employees or the operational and business groups do not have the adequate means to share information or knowledge with each other. Management and employees of siloed enterprises often end up working in isolation from the other parts of the company, leading to a variety of consistent internal and external problems such as internal subcultures that may not align with a company’s overall mission and culture, disenfranchised employees, task duplication and bad customer experiences. Identifying whether such siloing exists in a company provides a framework to begin to help the company address organizational training and work culture issues with specific solutions.

If a manufacturer is rated highly for the strength of their policies, but this strength is offset by what appears to be weakness in organizational behavior, the manufacturer likely will require assistance with organizational attitude and behavior issues first before expecting any technical improvements to lead to sustainable improvement in functional areas. Conversely, a manufacturer with a strong organizational culture will more likely be more effective and successful in adopting new technologies and innovations that support high-performance culture and behavior.

This differentiation between manufacturer policies and behaviors, as identified by the assessment provides a “roadmap” for the company and for potential assistance. While SMMs tend to have behavior rated more highly than policies, some nuances can be observed within operations. For example, it is not unusual for a process improvement to have a higher payback for different manufacturing shifts, among the first, second or third shifts. Any roadmap will need to address these nuances of functionality and organization behavior.

Keys to Success for Your Digital Supply Chain Initiative

The keys to success for SMMs in addressing their digital supply chain center around an “understanding level” and the cost of entry versus the expected ROI for the company. The main areas to address both dimensions of the assessment are:

  •  Knowledge – Many SMMs do not have a complete understanding of current trends and future needs for what will be required to compete in their industry or sector. Once leadership gains that knowledge and buys in, there will be challenges to get that message not just communicated throughout the organization, but “understood” and “appreciated” at a level that will drive and sustain changes in processes and behavior. For example, employees have confidence that their expected responses are the proper ones, and they know that they will be rewarded for demonstrating the organization's values.
  • Time – Any significant investment does take time to examine the options, vet solutions, implement, train and develop best practices. Innovation may also  require experimentation and some risk-taking.
  • Resources – In some cases an assessment may identify an existing lack of expertise. In other cases, a decision will need to be made in determining and dedicating the right resource to lead or champion an initiative.
  • Cost of Entry – In many areas, the cost of technology has decreased, resulting in greater opportunities for smaller manufacturers to achieve higher levels of productivity and profitability. As a result, the business case for an investment has improved significantly from a few years ago. For many SMMs, the cost of entry may be less than they expect, and the ROI, the return on the investment in terms of benefits and profitability, may be surprisingly fast.

Security Firm Uses Assessment as Foundation for Growth

Silverside Detectors in Cambridge, Massachusetts, a client of MassMEP, used its digital supply chain assessment to help design a factory. Silverside, founded in 2013, makes security and radiation detection products to protect transit networks, storage sites, borders, airports and other potential terrorism targets.

The initial roadmap was a foundation that they have built upon to secure compliance with the Defense Federal Acquisition Regulation Supplement (DFARS) cybersecurity regulations and, as a result, diversify their customer base by demonstrating they meet all of the applicable contractual flow downs. As they have grown, they have addressed functionality and organization performance goals in evaluating how to leverage technology, land more contracts and improve the quality of their hiring. They have also completed an agile methodology training initiative to improve their problem-solving practices to achieve greater value.

MEP Centers Can Help with Sustainable Digital Supply Chain Success

Manufacturers will need to reinforce and continually address their digital supply chains in order to remain competitive — from dealing with uncertainty in sourcing materials to an increasing adoption of cobots and artificial intelligence, and the growing importance of predictive maintenance to ensure uptime and productivity.

Your local MEP Center can help you assess your digital supply chain needs. Reach out today to schedule a consultation.

About the author

Doug Devereaux

Doug Devereaux is a Senior Industrial Specialist at MEP, where he focuses on the capture and dissemination of financial resources and strategies that can be used by MEP centers to help manufacturers develop innovative products or expand markets and sales. Over his 25 years experience at the state and federal Departments of Commerce, Doug has led industrial missions to the Pacific Rim and produced various publications involving such topics as laboratory technology transfer, business incubator practices, science and engineering trends in Asia, and community approaches to angel capital investment.

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