We caught up with Unipart Expert Practices MD Alan Kelly earlier this month to discuss the relevance of process and agility in promoting success up the supply chains of today—and tomorrow.
Whether you are reassessing the efficiency of your existing operations or planning to future-proof your supply chain, process and agility are two words that probably sound familiar (or at least set alarm bells ringing).
On the one hand, processes can put surety into your supply chain. They imply reliability, promise routine, and reduce variability. On the other hand, agility in your supply chain is essential for enabling you to adapt to market changes, rapidly ramp up volume, and take corrective action in the event of a crisis.
How do you balance both these key elements to drive an efficient and successful supply chain?
In the face of emerging technology, increasing customer demands, and fundamental changes to the way many supply chains have traditionally operated, this is a question Alan Kelly, Managing Director of Unipart Expert Practices, is trying to help enterprises answer.
We caught up with Alan earlier this month to discuss the relevance of process and agility in promoting success up the supply chains of today—and tomorrow.
Thomas Brown: I understand you moved into consultancy around 2005 from an operational manufacturing role. What did those processes look like back then? Have they evolved massively in the 11 years since?
Alan Kelly: Around 2008 and 2009, as you know, the economy collapsed. I was running the manufacturing practice then and we were selling these lean transformation programmes which were becoming more of a commodity purchase at the time. Then we had the big recession and customers thought: “We can’t afford the luxury of learning about lean. We’ve got some more pressing problem actually.” So it got me looking a little more innovatively around what our offering was to customers and how they could get a bigger return for their investment.
Brown: What did you find?
Kelly: Well, very often for the big players now, the OEMs, the prime organisations in aerospace, the weakest links are sometimes deep in the supply chain. You have your first-tier suppliers, and actually, some of them are very capable, but they’re knocked over by a lower tier supplier who may be manufacturing something as simple as a light bulb and switch. So I went to these customers and I said, “Look, here’s our capability. We’ve got a big heritage in engineering and we understand what engineering is because that’s our business. We know the nitty gritty of product introduction and what it takes to manage suppliers and all those kinds of things.”
We recognised that there will be other sectors looking to transfer best practice from what they perceive as world-class supply chains. Could we start to expand our capabilities out into other sectors that are looking for transfer of best practice?
Brown: Could you give an example of that?
Kelly: We actually had quite a lot of pull off aerospace companies because aerospace volumes have risen quite significantly over the last few years. Aerospace companies were saying, “We do the high-quality products at low volume but our volumes are going up.” They were starting to experience similar problems to the automotive industry.
The interesting thing is the situation has started to change in automotive where cars are getting much more specialist and technologically advanced. You’re probably aware you can have your high-end Range Rovers personalised with things like carbon brakes and other high performance components normally associated with F1 cars and such. So when somebody like Jaguar Land Rover are trying to source a carbon sports brake, they have to go to a motor sport supplier who are traditionally used to much lower volume supply and associated processes rather than the usual high volume, just-in-time automotive organisation. That presents itself with a new set of problems and risks.
Brown: So both industries are facing issues with adapting to changing customer requirements which put additional requirements on their supply chains.
Kelly: Exactly, it needs a whole different way of thinking to manage those suppliers. That’s affecting a wide range of industries which are now looking at building agility and quality assurance into their supply chains faster and deeper than ever before.
We’ve developed various supply chain assessments where you can very rapidly go in and assess supplier capacity and identify gaps. We then develop a practical action plan across a portfolio of suppliers to implement changes to ensure you match fast increases in volumes with quality.
We’ve also developed processes for rapid turnaround, in situations where customers come to us and say supply has been shut off because a supplier has keeled over. We can go in and quickly recover supply and then fix the problem long-term as well.
Brown: Okay, so you’re setting up these processes, how do you balance them with agility? Because you know, processes are routine and agility is about being flexible. How do you balance these two things for the customer who needs both?
Kelly: This is where we’re uniquely positioned because Unipart runs its own manufacturing and supply chain businesses that is linked to our own consultancy. We can respond very quickly and, particularly if a client is in distress. We can fill customer gaps in both resource capacity and capability in the short and longer term. That’s essential because clients need that agility.
There are also situations in supply chains when things do go wrong. So there is a strong need to have clear escalation processes in which companies can identify problems deep in their supply chains and work collaboratively to fix things that have gone a bit wobbly. It’s all about collectively understanding performance across the entire supply chain and working collaboratively by taking joint ownership of the problem.
We are able to support companies in those situation by introducing ways of identifying the root causes of the problem and working with multiple tiers of the supply chain to quickly introduce solutions that will last. Unipart has been doing this with complex supply chains in the automotive sector for over 30 years, so we have a strong heritage of addressing this situation.
Brown: You talked about being reactive and proactive, what about being predictive? I know there are a lot of conversations around big data and predictive analytics being applied to supply chains.
Kelly: Yes, working in collaboration with our logistics and manufacturing divisions we’ve created this control tower approach. It’s a way of taking all the data from the supply chain and being able to manage it and predict where things are going wrong or about to go wrong so that you can introduce corrective action where that’s appropriate. That’s about dealing with problems, but also making the supply chain fit for the future.
Brown: How far ahead typically do you look when you are looking to the future, and what are your priorities?
Kelly: Traditionally, I’d look at a horizon of five years. The trouble is, in the digital age, in the next five minutes everything can change.
That’s one of the key challenges for all organisations. The people who own and manage the data are going to be the ones in the position of power, so you’ve got to raise the quality of the digital areas of your own organisation in terms of people’s ability to understand what is happening deep in the supply chain and how it’s going to impact our organisation.
There’s also the application of new technologies to resolve complex supply chain problems. You may have heard, Unipart and Rolls Royce have a joint venture company called MetLase. It’s a very specialist and innovative engineering business that uses some clever technology and patented tooling techniques to increase speed and precision in areas like tooling and fixturing. For example, it reduces your lead times because you’re not having to wait 16 weeks for a die or a fixture, you only have to wait a week. It also gives you much more ability from an engineering perspective to immediately make interventions and modifications to improve the product in the development.
Because technology is driving change so rapidly, building agility and resilience in the supply chain is a key focus for most industrial companies. As a consultancy within a manufacturing and engineering company, we understand these issues very well. We’ve been developing bespoke solutions to help companies in sectors like aerospace and automotive to future proof their supply chains before they face a crisis.