Supply Dynamics — Making Sourcing/Supply Chain More Strategic Through Demand Aggregation (Part 2)

In Part 1 of this series exploring Supply Dynamics, a clever demand aggregation provider, I provided a quick overview of their approach to managing part and component raw material specification information as a core capability to drive demand aggregation. In continuing this analysis, the first point I'll hit on today is to reiterate the importance that Supply Dynamics places on maintaining current part information from bill of material data. Just as supplier information management vendors such as Aravo, CVM Solutions, Emptoris/Xcitec, Hiperos and Lavante place a currency on maintaining up-to-date supplier profile information (e.g., contact details, addresses, certifications, etc.) through supplier self-service, automated alerting, management/intervention by exception, etc., Supply Dynamics takes a similar approach to keeping BOM data up to date over time to aggregate specific demand (despite benefits of a centralized repository for such information going beyond material demand management).

The bill of material manager area of the application is essentially a purpose-built storage vault. Think of it like a contract management application that includes both a repository and a smart workflow/versioning tool. But in this case, instead of authoring, it provides a place to store data plus have suppliers and business units take the lead in keeping material up to date, including sub-tier part and assembly data. Supply Dynamics automatically breaks down assemblies into sub-assemblies based on part data, showing the buying organization exactly which suppliers supply which parts and what raw material specific and aggregate demand is on any level/tier a company wants to view, allowing users to drill into information.

Much of the secret sauce behind Supply Dynamics is the ability for the system to pull in design files (e.g., CAD files, TIFS, JPEGS, other design blueprints) and extract raw material specification information from them (there's also a team of experts supporting the application where manual data extraction capabilities are also needed or a new file type must be added). Extracted data fields from drawing files may include fields like assembly number, detail part, detail description, form, grade, material spec, length, diameter and weight. Then, the system automatically requires suppliers to log in and validate information, which provides not only increased accuracy, but also an audit trail that can also introduce additional qualitative information from both supplier systems and responses (e.g., manufacturing lead-times at different levels of the supply chain, last price paid, etc.) And if the information is not contained in design/engineering drawings, users can request it from suppliers with Supply Dynamics serving as a facilitator/intermediary if required.

Supply Dynamics then receives finished part schedules. Some OEMs refresh this data daily (or even more frequently). Others refresh it every week. The outcome of this approach has other benefits as well. For example, up-to-date information can make it easier to transition bill of material information from old suppliers to new while providing piece of mind that the data exists in one place (versus buried on some engineer's physical desktop). Think about the tool as SIM applied to direct material information, enabling companies to save on supplier transitions (including termination costs) by streamlining the flow of design and physical inventory information. With Supply Dynamics, for example, it's possible to make sure you don't leave old suppliers sitting on raw material inventory that you've paid for.

In a same manner, the application can provide a means to quickly see how you're designing (not just sourcing) historically. A user might find, for example, that across a dozen different alloys, his company has 550 different specifications. This might be an opportunity to standardize specifications by involving design-engineering teams. Although this is not a primary (or even secondary) value proposition for Supply Dynamics, simply centralizing aggregate material demand information can provide a means to gain this type of visibility.

Stay tuned as we conclude our analysis of Supply Dynamics.

Jason Busch

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