Improving your supply chain with Avnet
An interview with Neil Munns, Supply Chain Director, Avnet Abacus
Neil Munns, Avnet Abacus’ Supply Chain Director, has over 20 years of supply chain experience, including 11 years at Avnet designing, implementing and executing on supply chain solutions for EMS and OEMs across all segments.His previous roles have included semiconductor (TI) and IPE (Bourns) manufacturers as well as OEMs. He is focused on providing solutions that drive efficiency, reduce risk, sustainability and provide end-to-end value.
Best-in-class supply chain resources that can help your business thrive
Electronic equipment sits at the very heart of the way we live, work and relax. From the consumer technology we use on a daily basis, to the systems that monitor and control our critical national infrastructure, electronics is absolutely key to modern life – and its influence continues to grow.
The emergence and fast-paced development of the Internet of Things (IoT), machine-to-machine (M2M) communications, autonomous vehicles and other areas is driving the need for more and more connected devices. This, of course, requires more electronics. For any business involved in manufacturing electronic equipment –
whether that’s for consumer or industrial use – these trends are great news. Demand is healthy and is expected to remain so for the foreseeable future.
But demand is just half of the equation for success. A healthy, profitable supply chain must be capable of keeping supply and demand in as close to balance as possible. This requires visibility, broad product access, global reach and scalable resources that few organisations have. We spoke to Neil Munns, Supply Chain Director at Avnet Abacus to find out more about the challenges within the high-tech industry ecosystem and what the company is doing to help its customers thrive in this environment.
Why does the current landscape present such a challenge to product manufacturers?
Firstly, while technologies like IoT and Industrial IoT are driving substantial activity throughout a wide range of markets, including medical, consumer, aerospace, automotive and communications and networking, volatility has become the “new normal” in the tech sector. Many factors can lead to unstable conditions across different markets: natural disasters, politics, regulatory pressure, quality control, economic cycles and, of course,
good, old-fashioned consumer caprice. These affect both demand for manufactured goods and the cost and availability of components, as we are currently experiencing with the extension of component lead times. Even in the best of times, demand can fluctuate significantly, and often this unpredictability can lead to the classic bullwhip effect, further compounding the challenge.
At the same time, dynamics such as the increasingly interconnected nature of many electronic devices are making the overall technology ecosystem even more complex. When you factor in the growing speed of innovation cycles and pressure to get new products to market faster, it is clear just how big a challenge today’s electronics manufacturers are facing.
"The Avnet Abacus supply chain offering has enabled us to collaborate in analysing, designing and implementing a solution to align the supply chain to our goals. This allows us to focus on supporting and growing our customers with a reliable, flexible and efficient supply chain"
Peter Bouwsema, Head of Corporate Supply Chain, Neways Electronics International, NV
So what does a modern electronics supply chain need to offer if product manufacturers are to grow profitably in the current environment?
To succeed against this backdrop, manufacturers need a supply chain that is agile, dependable, resilient and of course, optimised from end-to-end. Achieving these qualities, without sending costs through the roof, requires the ability to sense and respond to changes in supply and demand.
A sense-and-respond supply chain is driven by demand. It takes actual consumption data and continually adjusts inventory. When properly executed, this model dramatically reduces the need for just-in-case (JIC) inventory, lowers obsolescence risk, improves supply chain sustainability, and increases return on investment. The larger the number of supply chain nodes in a company’s supply chain ecosystem, the higher degree of communication and collaboration needed to make productive use of sensing data.
Tell us about some of the things Avnet Abacus is doing to help make customers’ supply chains more agile and resilient.
At Avnet Abacus, we understand that with the competitive pressure on the supply chain, there is very little room for error. In a complex and fast- moving industry such as ours, the key to delivering quality services, mitigating risks, optimising inventories and exploiting business opportunities is to have complete visibility of our operations.
Since supply chains may encompass hundreds of different companies around the globe, each with a distinct role in getting a final product to market, OEMs need to have transparency into the operations and vulnerabilities – of each and every player if they hope to keep the supply/demand scale in balance. This transparency enables companies to proactively shift or reprioritise their supply chains based on changing supply or demand signals within multiple tiers of the supply chain – both up and downstream.
As a distributor, Avnet Abacus has the advantage of being uniquely connected to the full scope of participants within the supply chain – from our component suppliers to the various manufacturing and integration providers that may come
into play throughout the production process to the customer, the OEM.
How will a collaborative approach benefit customers?
With a centralised, 360-degree view of exactly what’s happening, even at lower-level tiers of supply, we can alert customers to a change in conditions that might impact their supply chain, such as a shortage in supply, expansion in lead time, PCN and obsolescence risk, concerns over cost relative to currency conversion or natural disaster affecting raw materials availability.
Avnet Abacus' collaborative approach to Supply Chain provides customised solutions to:
- Increase flexibility and visibility
- Reduce risk
- Reduce inventory
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- Improve working capital
- Reduce total cost to serve
- Improve end-to-end performance
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This visibility helps us plan more effectively, manage and reduce risks, and create realistic and robust contingency plans. For our customers, it means we can provide better information, more certainty, more flexibility and control and, ultimately, reduced costs and an improved experience.
What else is Avnet Abacus doing to enhance the services it offers to its customers?
Avnet Abacus has developed a six-phase methodology for implementing collaborative supply chain solutions. Our Supply Chain Consultants begin by conducting a thorough examination of the customer’s supply chain to ensure we have a clear understanding of the problem that is being faced. With this intelligence, we begin the process by validating the problem statement and ensuring it is aligned with the business objectives. The third phase goes deeper into designing the future state of the supply chain required to solve the problem and meet the business objectives. Once we are aligned on the solution to be implemented, the benefits statement, a statement of work and contracts are presented.
In phase five, the implementation of the solution is planned and executed starting with a pilot where required. Once complete, the solution is transferred to production where it is operated by our Supply Chain Analysts, and is subject to continuous programme review.
Benefits
The benefits of Avnet Abacus’s approach are:
- While others may offer one-size-fits-all solutions, Avnet Abacus collaborates with customers to provide tailored supply chain solutions focused on a problem statement – this maximises the benefit throughout the supply chain.
- Through the provision of structures, tools and processes to optimise both the supplier and customers’ supply chain we reduce risk, increase efficiency and reduce total cost to serve.
It’s an exciting but challenging time for electronics manufacturers who, more than ever, need a supply chain partner that gives them the control, visibility, flexibility, responsiveness and reliability they require to leverage the full potential of their supply chain as a competitive differentiator.
Avnet’s award winning magazine, Supply Chain Navigator, gives tech start-ups advice and tips on how to deliver more quick turn, customised products, while reducing their reliance on inventory. For more information visit: scnavigator.avnet.com
