In Product Design, Risk Management Starts at the Beginning

As the old saying goes, “an ounce of prevention is worth a pound of cure.” That’s especially true when it comes to managing supply chain risk.

In a time when supply chain disruptions have essentially become the norm, companies are working hard to constantly monitor their current supply chains for problems. That’s a critical step, but they can do even more by incorporating risk management into the product development process early on, at the design phase.

That means approaching product design and specification processes with a risk mindset as a matter of course. Reducing the use of customized components. Using components that are available from more than one source. Exploring the use of parts made in the U.S. and other countries that are less vulnerable to supply chain disruptions. Coming up with specifications for noncritical components that make it possible to use a variety of substitutions when needed. And so on.

Overall, product design teams should look beyond cost when choosing components and give supply chain risk as much weight or more when making decisions. That’s a reversal of the traditional approach, and not always easy to do in the face of constant cost pressures. But remember: Supply chain disruptions can mean that a company can’t deliver products to customers. That can be far more costly to the business than using slightly more expensive components, and it can lead to lost sales, disaffected customers, and reputational damage.

Work Closely with Suppliers

It’s also critical to work with suppliers on this risk-aware approach to product design. Suppliers should be consulted up front and asked to provide insight into potential risks from their perspective. What can they tell you about end-of-life plans for the components in question—theirs and those of their parts suppliers? How long and strong are their relationships with the manufacturers they rely on? How well do they know the potential risks involved in the countries they source from? Are they diligently managing risk in their supply chain?

Various channels of communication should be kept open to allow broad discussion of these issues. But companies should also ask suppliers these questions in a formal fashion. That is, they should require suppliers to provide detailed lists of potential risks in their quotes and master service agreements. This will clearly underscore the fact that they are expected to collaborate on managing supply chain risk. And it will give the company’s product-development group valuable insight into how to design risk out of products; allow procurement teams to weigh risk factors when evaluating proposals and vendors; and give the company an opportunity to make informed decisions about where it wants to assume, share, reject, or modify those risks.

We’re all familiar with the concept of “design for the supply chain,” in which products are designed with supply chain optimization in mind. Now, that needs to be updated to “design for supply chain risk.” The more product designers can know about supply chain risks in advance, the more they can do about those risks—and take steps to design supply chain resilience into their offerings right from the start.

Software Is Not a Panacea for Product End-of-Life Management

software laptop user

Many companies involved in the medical device and pharmaceutical industries use software to monitor the lifecycle of products and components, particularly those items nearing their specified end of life (EOL). But is this approach effective? Sometimes managers don’t realize that software is not necessarily a reliable lifecycle management tool until it is too late, after device decommissioning has had an impact on patients and public health safety.

Most large suppliers have designated EOL dates for products and components, but the end of life for certain medical device components is not as simple as just replacing the components. It requires a company to evaluate what’s being replaced, identify the impact, make necessary updates, and conduct rigorous testing and reviews to verify and validate the new product.

As we previously reported, if a product goes EOL without proper advance planning, it has the potential to disrupt the company’s supply chain, negatively impact revenue, diminish customer loyalty and incur unexpected costs. Companies failing to track EOL effectively also risk using technology that is no longer supported by its manufacturer, which can be dangerous and incur liability.

Managers may rely on software to plan for EOL, to be notified of upcoming EOL dates, and to manage change requests during an EOL migration. However, software solutions alone fall short, because the necessary end-of-life information often must be manually supplied by product manufacturers or suppliers. This human factor introduces risk and negates the accuracy of the software.

In those cases, the software designed to track EOL issues can provide companies with a false sense of security, leaving them in danger of being caught unprepared. Because software solutions always present an inherent risk of not delivering essential EOL information, companies need a reliable and automated means through which to obtain timely and accurate EOL information from their suppliers and OEMs.

Human Involvement Required for Complete EOL Transparency

Dynamic Technology Solutions has developed EOL and lifecycle management services to meet this need. We deliver on this requirement by proactively contacting the product suppliers regarding EOL issues to gain accurate, first-hand insights into current conditions and forecasts.

Armed with these insights, we can provide a consolidated view of lifecycle roadmaps with data integrated from our 800+ OEM and technology partners, enabling us to deliver automated alerts to key company stakeholders to inform them of EOL dates, which trigger a proactive EOL transition process.

Dynamic helps ensure seamless transitions and continuity for any changes that affect the components in our customers’ devices, while reducing risk. Learn more about Dynamic’s proactive EOL planning services by clicking here.

Software solutions provide efficiencies for countless business applications across different industries. But until there is a 100% reliable means to collect and disseminate EOL information from hundreds of suppliers, software applications for EOL management can never be expected to provide the level of safety and assurance required for medical device and pharmaceutical applications, where lives and human welfare is at stake. That’s why Dynamic invests the time necessary to ensure complete EOL transparency.

Supply Chain, Sustainability, and Workforce Challenges Top of Mind at Women Business Owners Conference

Women’s Business Enterprise National Council Conference

Last week, the Women’s Business Enterprise National Council (WBENC) celebrated 25 years of promoting women-owned businesses at its annual conference in Atlanta, Georgia. Held in person for the first time since 2019, the conference drew 4,000 people, providing incredible opportunities for attendees and suppliers to network and share information about the most pressing topics in the current economic climate, including supply chain struggles and challenges related to employee acquisition and retention.

As a woman-owned company, the Dynamic Technology Solutions team was on-hand to connect with other women entrepreneurs, learn about the challenges facing these business leaders, and meet face-to-face with the large OEMs serving this audience. Our representatives held many one-on-one meetings with medical device and pharma OEMs that included supplier diversity, procurement, and IT business members.

During the conference, we heard directly from suppliers that supply chain resiliency is now an imperative and that sustainability has become a topic of emerging importance.

Speakers and attendees noted that suppliers need to mirror their customers when it comes to adopting an environmental, social, and governance (ESG) perspective. Though there’s no specific road map to follow, it’s essential for suppliers to pursue some ESG initiatives and aspirations in order to even get in the door.

A Focus on Workforce Issues

Another recurring message for business owners at the event was that companies need to keep focused on workforce issues—not only in terms of how to attract new employees but also on how to keep them.

Employers focused on hiring and retention should keep in mind that since the start of the pandemic, workforce demographics have changed considerably. In contrast to members of older generations, young professionals are more likely to seek and value work-life balance, team environment, technology, sustainability, and alignment with company purpose when making decisions about employers.

As reported during the conference, close to 50% of young people polled entering the job market said that they would not join a company unless that company matched their values. This generational shift in mindset has become a real challenge in attracting and hiring talent from an increasingly tight pool of candidates.

One conference speaker offered a possible solution to address the shortage of qualified employees. Accenture CEO, North America, James Etheredge has initiated an 18-month professional apprenticeship program at the company to fill a significant need for skilled workers. The company hopes to fill 20% of its entry-level roles from the apprenticeship program in the U.S. by 2022.

Participating in the WBENC conference and other industry events is just one of the ways the Dynamic team stays informed and connected to the issues and challenges facing businesses today, helping them solve problems and deliver solutions for clients.

[Photo Caption]
Session at 2022 Women’s Business Enterprise National Council Conference. Source: WBENC

Skin in the Game: A Collaborative Approach to Identifying Supply Chain Risk


Transparency and visibility are critical to the effective operation of supply chains, and manufacturers and suppliers share a great deal of information in order to increase efficiency and predictability and, ultimately, get materials and products to the right place at the right time. But that type of collaboration often falls short in one key area—the identification of risk.

Typically, manufacturers are highly diligent when it comes to asking suppliers to share data about costs, schedules, and lead times—but very few apply the same sort of rigor when it comes to requiring information about upstream supply risks. They may hope that suppliers give them that information, or they may try to find it on their own, but they rarely press suppliers for it. As a result, there is an increased likelihood that disruptions will catch them by surprise and that they will be forced to react to problems rather than prevent them.

That approach is becoming less and less tenable. As a report from McKinsey & Company notes, we are now “operating in a world where disruptions are regular occurrences. Averaging across industries, companies can now expect supply chain disruptions lasting a month or longer to occur every 3.7 years, and the most severe events take a major financial toll.”

The “Push” Approach

Manufacturers can address this by establishing a disciplined process in which suppliers proactively “push” risk information to manufacturers, rather than waiting to be asked for it. That means that contracts and RFPs should require suppliers to provide information on potential issues with obsolescence, sourcing, sustainability, and compliance for the manufacturer’s mission-critical products and components. The point is to ensure that suppliers have some skin in the game, and a clear responsibility for scanning the horizon for risk.

This process should also include mechanisms that make sure that this supplier risk information is fed to the appropriate people and functions within the manufacturer organization. This should include product and engineering teams, who can use that information to modify designs to mitigate the identified potential risks. Internal teams should also communicate closely with suppliers to provide guidance on specifications and streamline the authorization of alternative components to help reduce risk.

Mutual Benefit

All of this will require fundamental change in the traditional relationship with suppliers, and that may make suppliers uncomfortable. Therefore, it’s important to remind them that the increased responsiveness to risk that this process will bring will benefit them and the supply chain as a whole, as well as the manufacturer. And it will them help build higher levels of trust that strengthen their relationships with their customers.

This process is not, in itself, a cure-all for supply chain risk, and manufacturers will still need formal internal processes for evaluating these risks using a broad range of data and mechanisms to ensure that senior management can monitor risk. But the flow of supplier information can support those internal processes. Suppliers are, by definition, in a better position to see upstream risks—and in essence, this approach lets manufacturers tap into that perspective to extend their “risk perimeter” further out from the organization. Moreover, in the event of an unavoidable disruption, the shared understanding of risk and the increased levels of trust will put suppliers and manufacturers in a better position to work together to recover, thereby enhancing the resilience of the supply chain.

To Achieve Supply Chain Resilience…Shift Your Focus from Cost to Risk Management


It wasn’t long ago that companies could keep watch on their component costs without having to give undue attention to supply chain logistics. All of that changed with the supply shortages and delays created by the arrival, in rapid succession, of the COVID-19 pandemic, climate-related events, and the Russian invasion of Ukraine, all of which highlighted the fragility of supply chains.

These disruptions have made it clear that supply chain risk management strategy must now be top of mind. As a recent article in the Harvard Business Review (HBR) put it, “As managers navigate this dynamic, they need to think beyond product costs and supplier choices.”

Some areas of supply chain risk that managers should address include:

  • Economic: Issues related to supplier health at every tier in the supply chain, including supplier bankruptcy or manufacturing stoppages
  • Geopolitical: The effects of international conflicts, such as U.S.-China trade issues and the war in Ukraine
  • Environmental: Issues related to natural disasters or sustainability, such as societal demand to reduce greenhouse gas emissions
  • Cybersecurity: Protecting against cyber threats to supply chain management

While many manufacturers previously approached their suppliers focused mainly on price, today they must develop a more strategic approach to achieve resilience, flexibility, and sustainability, said HBR. By focusing on supply chain risks, managers can learn to stabilize supply chain disruptions in the near term while developing structural resilience in the long term.

To do this, companies must have strategies that allow them to assess the risk of their suppliers, as well as to mitigate those risks, noted business benchmarking site Brainyard. Managers need to know what’s happening not only with their Tier 1 suppliers—the suppliers they work with directly—but also the Tier 2 and 3 suppliers further up the chain.

“Once an organization has assessed the risk of its supply chain partners, the best way to build resilience is to diversify its supplier base,” reported Brainyard. “That means finding redundant suppliers for key parts and materials that are located in different parts of the world so, for instance, a hurricane in a certain region doesn’t halt all shipments of a crucial material. It could also mean finding partners closer to home—maybe not in the same country but on the same continent.”

Diversifying the supplier base and keeping safety stocks on hand are costs that may be more expensive or hard to justify, but can be important for building structural resilience, risk management professionals at McKinsey & Company wrote recently.

Other actions that can be critical to building resilient supply chains include “creating a nerve center for the supply chain, simulating and planning for extreme disruptions, and reevaluating just-in-time strategies,” the McKinsey article noted.

With supply chain risks now firmly on the C-suite’s radar, leaders must not only create supply chain risk-reduction strategies, but also revisit and update them continually.

It’s only by taking steps to mitigate risk and find the best product options that you’ll achieve better business outcomes. Learn more about Dynamic’s portfolio of supply chain services designed to anticipate and mitigate internal and external risks.