SMTA International Conference Proceedings

Achieving The Excellent SCM: Diary Of A Practitioner Wearing The Ems And Oem Shoes

Author: Harjinder Ladhar
Company: Microsoft Corporation
Date Published: 10/16/2011   Conference: SMTA International

Abstract: Achieving excellent supply chain, a competitive advantage in diversified worldwide geographical locations with exclusively contrasting cultures, is becoming more and more challenging. Competitive market trends for shrinking margins, shortening time to market, increasing uncertainty in demand hence highly flexible delivery schedules, thin layer of resources, increasing product complexity, frequent ECOs, demand for high quality products, need for detailed accurate contractual agreements, improved communications, low contrasts in customer-supplier organizational objectives, efficient product development phases, and increasing customer requirements are some of the hard-to-optimize critical factors in the equation of SCM. The conflicting EMS and OEM organizational performance objectives with thin resources challenge effective resource prioritization to achieve world class products. Cross communication gaps between financial management involved in contractual processes and the frontline operation team leave performance metric partially defined. The aforementioned inefficient contractual process encourages the EMS to oversell their capabilities to win business in the highly competitive industry, but leads to high level of failures to meet demand for high quality, cheaper products with flexible deliveries. Incomplete releases of the product/process design to meet shorter time to market and the selection of cheaper and low performance materials are becoming the major detractors for excellent supply chain. Multiple weaker supplier management strategies, poor customer-supplier/cross-functional group communications, poor technical competences, lack of structural process development and enhancement methodologies and improper prioritizations are key detractors for excellent SCM between EMS and OEM. OEM can easily select the EMS from very few leftover global EMS suppliers with a wide range of capabilities including revenue in billions, global footprints and a complete range of supply chain. The similar easy-to-select range of tier 2 is also available. With the well-established engagement models, OEM can select the best EMS to efficiently support their supply chain management. They can fine tune and optimize their engagement model to reap benefits of the optimized partnerships. They can leverage each other’s expertise and fully mastered capabilities. If the engagement models are efficient and fully optimized, what causes the partnership to diminish and lead to divorce? What roles do each of the EMS and OEM play which makes the relationship smell dissatisfaction while it once was smelling pleasant and was very promising. What other factors intervene to make what seems like a perfect model of collaborations and tightly defined core competencies perform below the expectations of both parties, and cause considerable overhead inefficiencies, organizational stress, and finger pointing? There are numerous factors affecting the change of the prosperous and fruitful relation to a sad undesirable one. The impact level of the factors affecting the relations might be different from partnership to partnership but factors presented in this paper are similar in each case. The critical factors impacting the SCM are unveiled by the observer wearing the EMS and OEM shoes. The most practical solutions are also provided.

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