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

skin-in-the-game

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

supply-chain-resilience

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.

In the Face of Inflation, is “Just-in-Time” Simply Out of Time?

in-the-face-of-inflation

Given global supply chain disruptions, labor shortages, and other factors driving inflation, some companies are now actively questioning the just-in-time (JIT) inventory practices that have been dominant for the past several decades. In their place, these businesses are adopting a just-in-case (JIC) approach, which involves holding more inventory and working to develop flexibility in the supply chain.

The purpose of just-in-time manufacturing had always been to reduce inventories and save costs in the supply chain. But in this climate, JIT’s reliance on suppliers, who have been unreliable since the COVID-19 pandemic began, seems counter-productive. Incidents early in the pandemic, such as large shifts in demand for items such as protective gear and panic-demand purchases of products like toilet paper and cleaning supplies, quickly underscored just how fragile the world’s supply chains are. And the situation has only deteriorated since then, fueled by factors such as China’s production-slowing COVID policy and an upending of so many supply chains due to the war in Ukraine.

And few expect things to get better any time soon. In its recent PwC Pulse Survey, for example, the firm found that two-thirds of manufacturers predict that inflation will remain elevated throughout 2022, with nearly three-quarters expecting to increase prices during that time and less than half expecting supply chain disruptions to ease.

The surge in demand, coupled with ongoing shortages of people and products, has made it inevitable that manufacturers and businesses would pass along rising costs by sharply increasing prices and driving inflation. This has set the stage for a migration from JIT to a JIC strategy, through which businesses, by stockpiling goods, are able to hedge their bets against increasing prices. As a recent PwC article noted, “Pricing that perfectly aligns with cost of goods or just-in-time inventory management approaches seem like quaint and distant memories.”

Manufacturing expert Willy Shih of the Harvard Business School agrees, writing in Forbes that “having more material on hand can make a lot of sense, especially if it comes off a long supply line from China.”

It is, of course, possible that, in the near term, the shift to a JIC inventory approach could drive up costs and actually contribute to inflation. However, the end result, many financial reporters say, is likely to be more reliable and more local supplies, as well as improvements to the ways in which inventory is designed, manufactured, and sold.

In fact, according to the Financial Times, “Some businesses are increasing the inventory they keep on hand and entering into longer-term contracts with key suppliers. Others are diversifying their manufacturing to create regional hubs with local suppliers and investing in technology to give them greater advance warning of potential bottlenecks.”

The message, say PwC’s business analysts, is that manufacturers must be both resilient and agile in the current business environment if they are to contain the impact of rising price inflation and succeed in addressing supply chain snarls and shrinking margins. The analysts suggest that as prices of energy and materials rise, manufacturers can mitigate the impact on cost of goods sold through actions such as “being more aggressive in finding alternate suppliers that offer more attractive pricing or suppliers that are closer to your operations in order to trim delivery costs.”

What’s critical to consider, regardless of which inventory approach you use, is taking charge of your supply chain from the beginning and making sure your actions are most appropriate to your situation.

Ask yourself:

• In light of current crises and with inflation in mind, are you thinking about whether JIT or JIC is the right approach to these issues and risks?
• Are you not only anticipating risks but also mitigating them as they develop, whether they’re internally or externally generated?
• At the same time, are you paying attention to each product’s lifecycle, with a clear focus on potential end-of-life issues, ensuring that they won’t cost you time, money, or customers?

These are complicated times. But the solutions don’t have to be complicated. Learn more about Dynamic’s Supply Chain Management Solutions and get a copy of the company’s proprietary Supply Chain Risk ScoringSM process.

Supply Chain Cybersecurity: The Ukrainian War Increases Your Company’s Risk

Supply Chain Cybersecurity: The Ukrainian War Increases Your Company’s Risk

The war in Ukraine has brought the issue of cybersecurity into the mainstream of public opinion, with increasing media coverage of actual and potential Russian cyberattacks on businesses and infrastructure—often, far from the fighting.

These threats are very real, but for many companies they are not entirely new. Supply chain cyberattack risks, in particular, have been growing for some time, especially for companies in life sciences and other industries with sophisticated supply chains. And they can come from states like Russia, or from criminals.

A sampling of recent articles sheds light on the threats. The digital technologies that have made supply chains more efficient and responsive also make them vulnerable to bad actors. “The level of automation in the pharmaceutical industry makes it a prime environment for attacks. These environments are complex, and they haven’t been built to defend against nation-state attacks,” one security expert recently told the Biospace news site. The growing connection of operational technology to the network is also a factor, because it means bad actors can not only steal or damage data, they can also disrupt production and operations.

The variety of partners typically involved also makes the supply chain an attractive target. That’s because it increases the number of potential entry points, and it also means that a single attack can quickly move through the network to affect numerous partners.

Recent events have made this even more of a problem, as COVID and Ukraine have disrupted supply chains and forced companies to quickly turn to new, and often unknown, suppliers. As one security expert recently told Supply Chain magazine, this is a problem for medical devices manufacturers, “because on-time production and delivery can be a question of life or death. Supply chain is already the weakest link in any organization, even at the best of times. But for complex medical devices, where there is a multi-layered supply chain of hardware and software? For them, changing suppliers, or adding to them, significantly increases the exposure to risk.”

In short, cybersecurity will be a key supply chain concern for years to come. As a recent Forbes article noted, “Cybercriminals will continue to capitalize on the world’s heavy reliance on supply chains, infiltrating entire chains and not just individual companies…. More than ever, cybersecurity vulnerabilities are showcasing how interconnected we all are—as well as the fragility of many of these connections.” As a result, the article explained, supply chain cybersecurity should be a board-level issue.

Staying on top of the threat will require a multipronged defense.

Companies need to continue to harden their information and operational technology landscapes, through everything from zero trust security and education to combat social engineering, to security assessments, improved vetting of suppliers, and the comprehensive inventory of supply-chain assets. At the same time, they should prepare for the real likelihood that there may be a cyberattack on their supply chain and build the resilience to get back up and running quickly in the event of a problem.

Reflections on the DA4S Conference: ESG, Partnering, and Diversity

DA4S Conference

When the Diversity Alliance for Science held its spring East Coast conference in Newark, New Jersey, several members of the Dynamic Technology Solutions team were in attendance. The following is drawn from their observations during the conference.

For 15 years, the Diversity Alliance for Science (DA4S) has been focusing on bringing greater diversity, in terms of both people and companies, to the life sciences industry. At the recent DA4S East Coast Conference, two aspects of that effort were prominent throughout the event—the need to enhance Environmental, Social, and Governance (ESG) programs, and the forging of partnerships between a variety of companies.

ESG has been around for a while, but as the meeting showed, it is now more important than ever. Today, partners, suppliers, employees, investors, and customers assess the companies that they work with through the lens of ESG. That message came through loud and clear at the meeting, where large pharma companies talked about the ESG attributes they expect to see in their suppliers.

Those pharma companies have good reason to look for those attributes. A few years ago, the McKinsey & Company management consulting firm performed a meta-study of more 2,000 studies examining ESG initiatives and found that 63% reported a positive business impact from those efforts, while only 8% reported a negative impact. So, as discussions at the meeting made clear, ESG is no longer a “do the right thing,” corporate social responsibility initiative—it is a powerful business mandate that can drive real results, now and in the long term. Certainly, suppliers will need to continue to provide value and quality with their products and services, but ESG will need to be in the mix as well.

Meanwhile, the importance of partnerships, captured in the event’s theme of “The Power of Us,” was underscored in several ways. Some discussions, for example, explored how Tier 1, 2, and 3 supplier relationships can bring unique value and innovation to life sciences organizations. A number of supplier showcase presentations (including one by our Vice President of Business Development Tami Schultz) provided insights into a range of solutions available to partners. Roundtable events brought different companies together for mutual education and discussions of possible partnering opportunities. And in the final session of the conference, representatives from various suppliers joined their customer counterparts on stage to talk about the partnering journeys they had taken. Every story was unique, but they all shared a common theme: that partnerships are an important key to building growth and success.

The value of ESG and partnerships—and ultimately, diversity in life sciences—are well understood at Dynamic Technology Solutions. But it was good to have that view reinforced at the meeting, and to have a chance to collaborate with others to explore ways to improve the industry on both fronts.

[Photo Caption]
Dynamic Technology Solutions’ Robert Werner, Tami Schultz, and Dan Wood at the DA4S East Coast Connection in Newark, New Jersey.

Don’t Be Taken by Surprise: The Case for Proactive End-of-Life (EOL) Planning

Proactive Product End of Life

Not long ago, the manufacturer of an automated, high-performance medical device was getting ready to introduce a new system. The new product had been validated, and the company had scheduled the launch. But in a last-minute review, the product development team realized that one of the device’s key technical components was nearing the end of its lifecycle. There was no way the company could release the product with components that were about to expire but replacing them with a next-generation version would have required revalidation—and that would have significantly delayed the product launch.

The dilemma this company faced points to the critical importance of taking a proactive approach to end-of-life planning. Without that, this type of surprise can result not only in operational disruptions but also in financial loss and, perhaps more critically, an undercutting of customer loyalty—which could be long-term.

Too Little, Too Late

While most companies know they need to pay attention to product lifecycles, many rely on notifications from OEM vendors to alert them that the end of a product’s life is approaching. However, a recent study by SiliconExpert indicates that those notifications may not be coming soon enough. As SiliconExpert reported, “companies typically fall victim to a high demand and limited availability situation.” As a result, the study found that “28% of product change notices (PCNs) were for part numbers with last time buy dates of ‘immediately,’ meaning that waiting for a PCN may result in a costly redesign.”1

How can you avoid being the “victim” in this scenario? The key is starting by taking an integrated approach across engineering, product management, and the supply chain that not only includes a view of the entire product lifecycle but is also a critical part of the product management process. This requires understanding, identifying, and tracking each of the assemblies, parts, and raw materials that will become part of a finished good—capturing end-of-life data along the way.

Rank and File

While products with an active status might not have a published EOL date, it’s possible to estimate EOL by determining the normal lifecycle for each type of part and then subtracting the amount of time during which the product has been in production.

All the components should be ranked based on both their estimated lifecycle and their supply chain vulnerabilities—but it’s also important to consider how consequential each component is to the business and the disruptions that could occur should the part reach its EOL.

Understanding all of that will allow you to plan future updates proactively and look for substitute products or components well before you need them.

An important part of being proactive is qualifying second sources for the parts and components you’ll need. This involves validating alternate parts, identifying additional sourcing options, and planning two generations of a product or instrument simultaneously. By doing this, you can avoid potential supply constraints, long before you’re faced with either EOL or product obsolescence.

For the medical device manufacturer faced with a part at the end of its life, Dynamic was able to help by making a last time buy of all the stock of that product then available and holding it in the Dynamic warehouse. This allowed the company to make its launch date. At the same time, however, Dynamic was able to help the company prepare for the future by providing research and recommendations for available replacement options that met specifications and integrating those into the customer’s change management processes.

To better understand your company’s EOL risk and exposure, consider utilizing Dynamic’s newest tool, the EOL PrepSM Self-Diagnostic, which is available on a complimentary basis to industry professionals by clicking here.

 

1 https://www.siliconexpert.com/wp-content/uploads/2020/10/SiliconExpert-White-Paper-How-Reliable-is-EOL-Forecasting.pdf

Dynamic Technology Solutions Attends Diversity Supply Chain National Education and Training Event: ACCELERATE 2022

Dynamic Technology Solutions showed a strong presence at ACCELERATE 2022, the premier education and training conference of the Diverse Manufacturing Supply Chain Alliance (DMSCA). Dynamic was represented by Vice President of Business Development, Tami Schultz and Business Development Director, Bob Werner at the convention which featured over 30 leading organizations in the manufacturing space.

The event, held in Scottsdale, AZ last month, addressed practical small-midsize manufacturer development solutions, with a focus on digitalization of supply chain management in the current, ever-changing environment.

“There was a strong emphasis on passion,” said Schultz, as she shared her impression of the event. “Passion for digitalized supply chain, passion for the importance of diverse suppliers that innovate and drive results for leading manufacturers.”

The panel discussion around “Supply Chain Collaboration Through Advanced Manufacturing Technologies” proved to be a highlight of the conference. Featuring special guest, Felipe Bezamat Kuzmanic, Head of Advanced Manufacturing and Global Leadership Fellow at the World Economic Forum, this session addressed current supply chain constraints due to COVID-19. This topic has been a point of emphasis for Dynamic over the last two years, as the organization published multiple resources to aid suppliers and manufacturers in navigating the pandemic, including a proprietary methodology, Supply Chain Risk ScoringSM.

Another interesting session was a demonstration on the “Use of Augmented Reality (AR) and Virtual Reality (VR) and the Connected Worker” by Brian Townley, Business Development Associate at MxD. Brian detailed the use of VR and AR in the workplace, enabling non-technical associates to make repairs on complex technologies without in-depth knowledge of the devices. Dynamic has identified an increase in the use of virtual reality in the design and design for manufacturing phases of product development in its clients and the life science industry. This session was a welcome addition to the conference and educational for the DTS team.

The event was well attended and served as a homecoming of sorts for one of the prominent diversity-led supplier development organizations in the supply chain strategy sphere. After a long and patient wait, an in-person event provided meaningful interactions and networking opportunities.

“This was a great opportunity to collaborate with members of DMSCA face-to-face,” Bob Werner reflected in reviewing the event. “I was impressed with participation by leading manufacturers with key Sr. Leaders and staff in attendance. I look forward to growing the relationships we made and implementing what we learned into our day-to-day functions.”