Why ‘Supply-Driven Design’ Should be a Core Focus For Your Organization in 2024

In the early 2020s, the global COVID-19 pandemic disrupted the global economy. The electronics manufacturing sector and its global supply chains were impacted. Today, four years later, OEMs face higher component prices and fragile global supply chains. Deliveries are often delayed due to limited factory capacity and supply chain challenges, negatively impacting OEM revenue and profits.

A new IDC PlanScape report details the numerous benefits of “Supply-Driven Design” (SDD), which combines multiple technologies into a “digital thread”  to enhance the design process. Join us as we explore how Supplyframe and Siemens offer a similar approach to addressing challenges in the electronics value chain. 

Is it Time For Manufacturers to Rethink Design Processes? 

John Snow, research director of product Innovation Strategies at IDC, explains why a new approach is needed in 2024 and beyond, saying: 

“Given the current fragile environment surrounding geopolitical trade, increases in natural disasters, and labor shortages – especially within existing manufacturing regions – supply chain disruptions are anticipated to continue, and manufacturers need effective ways to respond to these challenges.” 

Indeed, the events of the last several years have revealed numerous vulnerabilities in today’s global electronics value chains. The need to change is understood, but many organizations are stuck in “firefighting mode,” addressing small one-off issues instead of examining the larger opportunity for a holistic digital transformation. 

After all, it’s understandable that quick wins can solve minor issues with sourcing and design, but the problems (and opportunities) run deeper. According to Supplyframe research, 80% of a product’s lifetime risk is “locked in” during the design phase. 

This presents a significant opportunity to address core issues within existing design processes and apply new technology and collaboration to transform the entire product development process from design to sourcing and throughout the product lifecycle. This approach allows for more resilient designs that proactively account for supply chain disruptions like price volatility, extended lead times, obsolescence, and other key factors. 

Better Design Leads to Smarter, More Sustainable Sourcing

Much like the concepts of SSD, Supplyframe and Siemens also champion an approach that looks at product development and invites industry leaders to “Shift Left,” bringing their focus to the concept phase of any given NPI initiative.

There are opportunities here to strengthen the foundation of the organization’s digital thread by incorporating outside-in intelligence into the bill of materials (BOM) used by design and engineering teams. Access to real-time intelligence and suggested alternates that match form, fit, and function allow these teams to seamlessly sidestep products that present short- or long-term risk. 

In addition, better decision-making requires a deeper understanding of broad electronics commodity trends, which can provide a forward-facing view of trends. A recent innovation from Supplyframe addresses this use case as part of our DSI Platform 2.0 update. 

Among several new features for customers who utilize our Design-to-Source Intelligence solutions, AI insights allow users to view curated analysis from our Commodity IQ intelligence platform in relation to the individual parts on their BOM. 

Supplyframe CMO, Richard Barnett, explained the value of these new risk assessment features, saying: 

“Until now, no one in the industry had a way to normalize risk assessment of their product portfolio in a consistent way. With the DSI Platform 2.0, customers have a new, standard way of assessing risk that’s more comprehensive at every critical decision point. Additionally, AI insights’ ability to identify emerging risks and recommend key potential tradeoffs to balance risk, cost, quality, and ramp to volume goals is very powerful.” 

Better visibility into risk transforms the entire design process by offering reliable, real-time intelligence and accurate forecasting from the beginning. To complete this transformation, however, teams must also break down long-standing silos and collaborate not only with each other but with suppliers as well. 

Collaboration Between Engineering and Procurement 

The first step to building supply chain resilience across the organization is to make external data available and actionable at each level. Supplyframe’s DSI solutions enable this through collaborative features like tracked changes, messaging, and support for multiple users within the platform. 

Collaboration with suppliers is also possible and highly encouraged through visibility into real-time inventory, pricing, and lead times. Our quoting module also allows suppliers to respond to RFQs within the solution, further breaking down the existing walls between engineering, procurement, and supply management. 

As the NPI process incorporates other stakeholders like procurement, sourcing, and product managers, the ability to collaborate across teams within a single source of truth eliminates many of the problems that stem from current processes. Namely, it allows for a consistently updated BOM that always reflects the latest insights into risk. 

Opening these communication channels and pairing them with reliable insights leads to a truly transformed NPI process from end to end. 

Transforming NPI to Mitigate Risk and Reduce Costs 

The tenants of SDD align well with the core focus and capabilities that Supplyframe NPI brings as part of the Siemens Xcelerator open digital business platform. Combine dynamic BOM validation and risk-mitigating tools, real-time component intelligence, easily identifiable alternates, and cross-functional collaboration capabilities to benefit your enterprise. 

To learn more about what “Supply-Driven Design” can do for your organization, purchase the full report from IDC PlanScape here. 

Sources: 

1: IDC, IDC PlanScape: Supply-Driven Design, Document number: # US48627722, Dec 2023.