Manufacturing and
Supply Chain Integration
In order to maximize customer value, companies seek to develop low-cost products that meet their customer’s needs, and to deliver those products in the shortest time possible. In many cases, however, the lead time for manufacturing a part exceeds the time required for designing the part.
Due to the significant contribution this lead time plays in terms of overall product development cycle time, in many cases, a company cannot achieve its goals for new product introduction unless the lead time for manufacturing parts can be reduced.
Cost is another factor that significantly influences product development success. From a supply chain perspective, procurement cost represents a significant portion of a product’s total cost. For companies that rely on their supply base for manufacturing the parts and products they produce, this is a major issue.
Consequently, successful integration of the company’s supply chain with product development is critical in enabling the company achieve its cost reduction goals for producing low-cost products.
A key objective of Manufacturing and Supply Chain Integration is to eliminate the “throw it over the wall” mentality that exists between the product development organization and the departments responsible for manufacturing and procuring parts. To accomplish this, it is imperative that a company develop a strategy that embodies two key elements:
- Identify requirements and key processes that support the manufacture of its products
- Align manufacturing requirements with suppliers possessing
the capability, willingness, and commitment to support the
company’s goals for producing high-quality, low-cost products
Matching manufacturing requirements and process capability is a fundamental element of Lean manufacturing. Interestingly, successful execution of this strategy by the procuring company has, in many instances, provided the incentive for suppliers to create Lean manufacturing cells of their own!
Due to the heavy influence manufacturing has in the product development process, successful integration of manufacturing and supply chain activities with product development can yield dramatic reductions in production lean time and part cost. Consequently, Manufacturing and Supply Chain Integration represents another streamlining element in the APD System.
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