Executives already face relentless pressure to reduce Cost of Goods Sold by optimizing the supply chain wherever possible.
Recent events have vividly demonstrated the added challenge of developing a supply chain that not only minimizes costs, but limits the operational risks stemming from unanticipated disruptions.
Fortunately, executives have a more powerful option than ever for equipping engineers and sourcing professionals with the tools they need to meet this challenge: digital manufacturing simulation.
In this article, we overview three important ways that simulated digital factories can help manufacturers reduce cost and risk throughout the supply chain. For a deeper dive, we recommend our whitepaper on this topic:
How does digital manufacturing simulation help with the supply chain?
Using digital manufacturing simulation software like aPriori, engineers and sourcing teams can evaluate a component directly from its CAD model, which can then be built in a simulated “digital factory.”
This digital manufacturing simulation process can be used to compare cost variations across multiple geographies and production facilities. Therefore, Engineers can see the most economical alternatives and catch manufacturability issues before a design is sent out for quotes to the supply chain.
This capability helps root out potentially costly issues while a product is still at the design stage (for more information on this topic, see our guide to what a design “should cost” here). It is also incredibly valuable when sourcing products from new suppliers.
Using digital factories, manufacturers can:
- Benefit from granular insight for strategic supply chain planning.
- Collaborate with suppliers for the most efficient price.
- Implement a dramatically streamlined quoting process.
Digital Manufacturing Simulation for the Supply Chain: Strategic Planning
Digital factories catch manufacturing issues early, giving engineers and sourcing teams time to strategize the optimal solution.
Simulated manufacturing cost models provide essential data for supporting strategic decisions like build-buy. By catching internal manufacturability issues early, engineers can avoid leaving the sourcing team with last-minute needs for components that have proved impossible to produce in-house.
When issues are caught in the digital factory, the business has far more flexibility to respond optimally, whether that’s sourcing from a third-party supplier or investing in new machinery internally. But if issues are only caught once a design is verified and prepared for production, it may be too late.
With aPriori, engineers can easily see which machines will be required for a particular design alongside detailed metrics on which cycle times are required by each part of the process. This information allows for a quick determination of how many machines a supplier will need to fulfill the required production volumes. This sort of intelligence is essential when responding to a supply chain disruption.
When an unanticipated supply chain disruption occurs, today’s manufacturers cannot afford to wait weeks to send out quotes, wait for responses, and begin piecing together a viable alternative.
Using aPriori, suppliers can be filtered using variables like regional labor rates and machine availability. With this information in hand, urgent sourcing needs can still be matched with a highly efficient supplier capable of consistent, on-time delivery.
Digital Manufacturing Simulation for the Supply Chain: Maximize the Efficiency of Third-Party Suppliers
Digital manufacturing simulation can even help uncover inefficiencies within the cost structure of third-party suppliers.
For example, materials costs for suppliers can be easily compared to rates available internally. A manufacturer with access to a better rate can buy the materials and have them shipped to the supplier.
Suppliers won’t always successfully anticipate production problems on their own. They may not recognize a problem until issues begin appearing on the factory floor, leading to excessive defect rates, cost overruns, or even a complete inability to deliver. The issue may be rooted in the design but could also be due to the supplier’s choice of equipment. In either case, the earlier the issues are caught, the more potential solutions are available.
Digital Manufacturing Simulation for the Supply Chain: Streamline Quoting
Digital manufacturing simulation reduces quoting delays and can even be used to implement a “Zero-RFQ” process.
Design-stage manufacturing simulation means fewer surprises and less “design churn” as quotes are passed back and forth with a supplier.
If quotes come in higher than expected, simulated manufacturing cost models are the perfect foundation for a productive, fact-based negotiation that can focus on underlying cost drivers instead of negotiating tactics.
Over time, aPriori provides a great collaboration engine for working with suppliers to build a fine-tuned understanding of their manufacturing costs and capabilities. For favored suppliers, aPriori’s models can be tuned so accurately that traditional quoting can be virtually eliminated. In this “Zero-RFQ” ideal, a purchase order can simply be issued to the supplier with full confidence in the first-pass quote.
Learn More About Digital Manufacturing Simulation for the Supply Chain
The benefits discussed above add up to more than the sum of their parts. As a manufacturer uses simulated manufacturing to model more components and suppliers, they generate valuable knowledge on which suppliers perform most effectively across different types of manufacturing. Instead of arbitrarily sourcing an entire assembly to a given supplier, each component can be rationally matched to the most efficient possible source.
We hope this article has provided a valuable overview of why digital manufacturing simulation can help build a better supply chain. If you are interested in learning more, our white paper on this topic provides a deeper exploration: