Category Archives: Lean

Part Analytics Get PARTicular About Your Electronics-Enabled Supply Chain and Source Smarter with Deep ANALYTICS-based Insight

Over the past few years a few vendors have come out of the factories to support your direct-specific supply chain, but there’s still only a few that specialize in the Electronics Supply Chain (especially when you include deep sourcing [automation] support) and PartAnalytics is one that you may not have heard of, but definitely should know of given their ability to drastically reduce direct sourcing times for electronics components while reducing costs, lead-times, uncertainty, and compliance.

Part Analytics was founded in 2019 to increase open collaboration between Original Equipment Manufacturers (OEMs), Electronics Manufacturing Services (EMS), and suppliers, starting with a comprehensive, standardized source of information for direct components and materials used in electronics-based manufacturing. This would allow demand and supply information to be shared, costs and lead times to be better managed, and supply chain risks minimized. Founded by global sourcing professionals with expertise in electronic and electro-mechanical supply chains, they applied their deep knowledge of products and buying processes to build a solution that would not only simplify the sourcing process for components and bills of material, but also allow much of it to be automated.

The Part Analytics solution is split into four primary modules (which can be accompanied by a fifth that serves as a cross-platform executive dashboard):

  • Part IQ: Contains detailed part data for the electronic / electro-mechanical parts the organization sources
  • BOM IQ: Contains detailed information on BOMs used by the organization (for sourcing purposes)
  • Category IQ: Aggregates part information across BOMs to provide insights into demand, benchmarks, commodity, and supplier risk information and provide analytical insights to reduce spend, lead-time, and risk
  • RFQ IQ: deep RFQ functionality for sourcing (automation) on a Total Cost Basis (TCB) (with up to 97% manual time savings once an event has been setup)

In this article, we will look at each module individually, after noting that since Part Analytics is focused on the electronic and electro-mechanical supply chains, most of the sourcing projects (60% to 70%) revolve around PCBs (Printed Circuit Boards, not Polychlorinated Biphenyls) and related components. As a result, the focus of most of their customers is on part and material cost and lead-time optimization in those categories specifically, which is why their central focus in Part IQ is on those components.

Part IQ

Part IQ is the global supplier parts library that

  • represents the integrated catalog across all suppliers,
  • maintains the organization AVLs (Approved Vendor Lists)
  • maintains Part Analytics‘ and the customers’ internal PPE (Prescribed Parts Equivalent) lists
  • maintains part cost and risk details by part
  • makes global search by part and equivalent quick and easy

Part IQ contains a database of hundred of thousands of components from thousands of suppliers globally and provides real-time inventory availability monitoring from distributors and suppliers. It’s also capable of monitoring part availability and notifying the buyer as soon as a specific part becomes available anywhere in the network.

Deep detail is maintained on every single part and includes information such as manufacturer and part number, usage, prices, savings opportunities, and alternates. It also cross-references BoMs containing the part, known risks associated with the part, and Part Analytics.

This allows a design engineer to quickly gauge availability during R&D or build-to-order quoting, as well as sourcing professionals to quickly gauge immediate availability, lead times and expected pricing if they also have Category IQ (to be discussed later) as it can pull in trends and insights from the Category IQ module. If they integrate with their PLM, they can also see current inventory within the tool as well as pull in product forecasts to see if the available supply is likely to meet their demand.

It also helps R&D to ensure compliance with industry and market requirements as Part Analytics harmonizes all of the data and they can quickly tell not only if a product is compatible, but if it is compliant with certain regulations as detailed specifications with the required material composition will always be available in the drill down.

BOM IQ

Arguably the core of the suite, BOM IQ (or Bill of Materials IQ) stores all of the electronic / electro-mechanical bill of materials being sourced by the organization as well as associated forecasts/demands from the PLM solution (and can push updates on material availability, inventory, AVL, and approved PPEs into the ERP if desired).

At the BOM level, it provides an organization with insight into:

  • the overall health rating (based on compliance, material/product risk, product/part/line-item health)
  • the number of unique line items with lead time, lifecycle, single source, RoHS, or other supported compliance risk (if data feeds/subscriptions are available)
  • the current annual spend summary and projected spend summary
  • BOM cost trend over time
  • the total estimated savings available from based on alternates and negotiation

For every line item it also stores all of the relevant associated information including, but not limited to manufacturer, distributor, current costs, usages, risk/health rating, and information from past events. It’s very easy for a user to navigate around the BOM IQ product and see not only current prices and usage, but to drill into associated risks and compliance.

In a nutshell, the solution provides actionable data by leveraging technology to contextualize data from hundreds of sources including distributors and manufacturers.

Category IQ

Category IQ rolls up the line-item/part/component/material intelligence by category and allows an organization to get an overview of their spend, opportunity, and risk from various points of view such as commodity, supplier, business divisions and products. This allows the organization to get a comprehensive view of spend and savings potential from different viewpoints and make the best overall sourcing decisions for the organization.

More importantly, the organization can also see a roll-up of risks and non-compliance by category, which can be filtered to certain risk types to allow the organization to address the most critical risks first. Especially since it can roll up the number of units in a given life cycle state, being single sourced, etc. and drill in to parts coming from a specific region to allow an organization to quickly assess the potential impact of geographic/geopolitical events and disasters on the supply chain.

Once the buyer has a firm handle on her categories, she can proceed to sourcing in RFQ IQ.

RFQ IQ

With a strong understanding of her categories, a buyer can initiate sourcing projects using RFQ IQ. This module simplifies the sourcing process by allowing buyers to set up events with ease. Key elements include defining line-items or BOMs, approved vendors, questionnaires, and bid sheets with detailed cost breakdowns.

Upon receiving bids, buyers benefit from a comprehensive summary that highlights the total parts up for bid, the number of bids received, and potential new spend based on the lowest bids. This summary also offers insights into category spend by business unit.

The platform enables buyers to delve deeper into individual supplier bids, comparing spend differentials and assessing the impact of choosing specific bids. Buyers can utilize automated features to award the lowest bid by supplier on a part or BOM basis, or make manual adjustments to finalize awards. Notifications are then sent to suppliers, and the award details can be integrated into the ERP system to initiate the contracting and P2P process.

One of the standout benefits of RFQ IQ is the ability to automate much of the sourcing process. Once the master file is established, buyers can launch events by simply defining timelines. Automation can handle the process from initiation to award recommendation, significantly reducing manual effort. For example, one client saw a reduction in manual effort from 710 hours to just 10 hours, thanks to the module’s robust automation capabilities. While results may vary, most organizations experience efficiency gains of 30% to 60%, depending on their automation preferences. Additionally, the overall sourcing process time can be cut from months to mere weeks, providing substantial time savings.

Furthermore, since the demand can be defined by business unit, it allows their customers to maintain their decentralized structure (as the platform can support bids by business unit when each is in a different location and would dictate a different landed cost) while still supporting volume consolidation through a Centralized Center of Excellence (COE) for cost reduction and best practice sourcing. This also allows an organization to get a fully centralized view into their global supply base by category, BoM, and part; identify key areas of material/part/product-based risk that needs to be assessed; and harmonize costs and lead-times at the same time.

By giving buyers a global view, they can identify all FFF and F component alternatives, including those that are more readily available, higher in quality, and/or earlier in their life-cycle, allowing the organization to identify potential strategic OEMs and suppliers early. And for off-the-shelf, always having centralized insight into global supply across hundreds of distributors is extremely valuable when a disruption happens in your current supply chain.

Furthermore, the fact that Part Analytics is PLM (and not ERP) first means that buyers have a firm handle on not only what Manufacturing needs, but what R&D is working on and can ensure R&D is not designing for materials/parts that could be expensive or hard to get and/or maintain a stable supply of when there are more affordable, more available, or more reliable alternatives available.

Plus, if desired, part and BoM population can be done entirely from spreadsheets, allowing for an organization to get up and running quickly as a) most organizations without a system custom designed for electronics / electro-mechanical direct sourcing, even if they have a modern PLM (and/or ERP), maintain all their part and BOM info in spreadsheets. Not only does this allow Part Analytics to get an organization up and running quickly, but it also allows them to instill best practice as Part Analytics serves as the Parts Master and, once the PLM integration is completed, always keeps the BOM in synch, and the organization never has to worry if they are sending the sheet with the right version of the BOM (was that v.21 or v.23 we finally decided on) to a supplier for bidding.

Looking Ahead

Right now, it’s just cost trends over time for category intelligence, but by Q4 Part Analytics intends to release advanced commodity/sub-commodity insights around pricing trends, availability, and lead time using advanced analytic and forecasting algorithms and supply and demand signals in their Category IQ Module.

Also, as indicated above, future releases will support more data integrations for supplier (and not just material/component/part-level) risk analysis.

Summary

Part Analytics is a great solution to harmonize sourcing, inventory, and supply chain visibility in your electronics and electro-mechanical spend categories. Furthermore, it’s real-integration to hundreds of OEMs and distributors provide invaluable real-time insight into supply, demand, lead-time, and cost trends and benchmarks that can help organizations get a better handle on their overall sourcing efforts, especially if they primarily run as a decentralized operation across product lines / business units or geographies, especially since it can unite engineering and commodity sourcing teams on one coherent picture. It’s a great solution for part-based supply chain visibility, and for deeper insight into how to achieve this, you can download and checkout their handbook on supply chain visibility.

Demand Control: Reduce, Reuse, Recycle, Redefinition and … Requisition Everything!

Part of good cost avoidance in Procurement is good demand management — reducing the consumption, and expenditure, on MRO, T&E, one-time buys for events, etc. We’ve covered the classic techniques in the past, which include:

Reduce: which can be accomplished by accurately predicting needs (and reducing waste) based on past use and current trends (and not maintaining volume levels on toner cartridges for a printer line being phased out)

Reuse: which can take the form of repurposing old equipment (as old developer workstations are probably just as powerful as the business user desktops used in the rest of the organization) or simply collecting unused/discarded collateral at an event and using it again next time

Recycle: where MRO inventory can be replenished by breaking down equipment (like workstations, production lines, etc.) that go out of service and harvesting still working parts that can be used in other equipment

Redefinition: where it’s not a need for more paper, but a need for second / bigger monitors so that people don’t need to print invoices / documents still submitted as (scans of) handwritten documents that can’t be OCR’d or that aren’t in a format the OCR recognizes or for tablets that allow executives to access their reports on the go

but a new type of demand management is popping up in the Procurement world, and it’s called:

Requisition Everything: where you have to literally submit a requisition to the procurement system so that all demand, and consumption, is tracked (and you can be visually guilted to control demand or utilization if you are consuming significantly more of a resource than your peer).

Now, this probably sounds very onerous to you and not worth it, but it all comes down to the implementation and user experience. At Coupa inspire, one company described an innovative method that they used to track and control demand on the factory floor (where workers would forget where they put their gloves, or realize they left them in the lunch room, and just go to the closest supply room or where workers would store extra tools or parts at their desks, just in case, leading to low stock signals and unnecessary ordering). They installed vending machines and when a worker needed something, they needed to go to the machine and punch in their id and slot number. Nothing was restricted (and no limits were placed), but every “requisition” was sent to the central Procurement system which not only updated MRO inventory but also tracked who used what, and allowed Procurement, and departments, to understand usage patterns better. This simple process reduced demand as it instilled the notion of cost consciousness and responsibility in the workers (who knew that their usage patterns could be analyzed and if they consumed considerably more than their peers, it would show), and didn’t really add any time or complexity to the process (as all the workers had to do was punch a few buttons) — especially since this process insured that the workers always knew where the stock was (which wouldn’t happen if it was moved around on the shelves).

Moreover, this technique is not limited to what fits in a vending machine — one could also use cheap RFID tags for larger items (of sufficient value) that would automatically be requisitioned when the tag left the store room (and be assigned to the right person using the employee record obtained from the entry control system when the person swipes their key card).

And, with micro-budgeting, it can be used to insure departments don’t go over their allotted new-hire budget unnoticed. New hire equipment can be kept in the secure storeroom, automatically tracked when retrieved, and automated re-orders made if stock gets too low. Plus, reusable equipment can be returned on employee departure, residual amortization amounts credited back to the micro-budget, and employees / departments who opt to use recycled equipment can be charged a deep discount against their micro-budget (and, more importantly, rewarded at annual recognition events as reuse stats can be tracked).

Now that almost everything can be automated, it might just be the time for Requisition Everything as the new method of employee-based demand management and cost control. Thoughts?

Want Lean Success? Get Lean With Your Lean!

Inbound Logistics recently published a short article on How to Deploy a Successful Improvement Program that chronicled the advice of APL Logistics’, who saved 30M through continuous improvement initiatives, foremast Lean/Six Sigma/JDI professional that had some really good advice.

To summarize, the article outlined a five-step method for deploying a successful improvement program.

  1. Choose One Quality Discipline and Focus On It
  2. Choose And Deploy Your Preferred Training Model
  3. Select the Right Members For Your Project Teams
  4. Choose the Right First Projects
  5. Continuously Improve Your Odds of Program Success

Two of these tips in particularly are especially poignant. In particular, tip #1 and tip #4. The secret to success is focus, focus, focus. Don’t try to adopt too many initiatives at once and don’t try to take on too many projects at once. Just like too many cooks spoil the broth, too many initiatives spoil the effort.

Lean projects, like any other type of improvement project, take effort to accomplish, and there is only so much effort that can be applied to any project. Thus, undertaking multiple types of improvement initiatives splits the effort that can be applied to each, and reduces the chances of success.

Similarly, undertaking multiple projects simultaneously reduces the effort that can be applied to each project, and extends the amount of time required to complete it. If a project takes too long, the chances of it being cancelled before it is completed increase, and, thus, the chances of failure.

When a new effort is undertaken, success often depends on a quick win, and a quick win depends on selecting a project that can be completed in the effort available — and focussing all of the effort available to make it a success. This means that the last thing you should do is start a second effort half-way through the first in an attempt to duplicate a success you do not yet have. Get one success, then start another project. Get another success, start a third project. Once you have a pattern of success under your belt, you’ll get more support (in the way of effort available) and then you can start multiple projects. Until then, get lean with your lean initiative.

Leaders vs. Laggards in Lean

Earlier this year, SC Digest published a comment from Mike Loughrin, CEO of Transformance Advisors, on Designing a Lean Transformation Program that not only covered four key indicators of success in a lean transformation, but also covered the differences between leaders and laggards that deserve a second look.

According to Mike, the four key indicators of success are:

  • Methodology
    Lean is the systematic elimination of waste by way of the five principles of value specification, value stream identification, flow creation, leverage of pull, and the continual strive for perfection.
  • Measurement
    While lean is the top priority, measurement is second as it is necessary to determine the status of the transformation.
  • Community
    Lean succeeds when best practices are shared and people collectively improve upon them.
  • Coaching
    Lean succeeds when mentors coach novices so that they can grow into future mentors.

So how do you distinguish leaders from laggards? According to Mike:

Indicator Leaders Laggards
Methodology Very systematic in the approach to lean. Adopt a couple of techniques from the lean tool box and apply these hammers to every problem whether or not it mimics a nail.
Measurement Assess all of their value streams and focus attention on those areas that need improvement the most, getting to the root causes of the issues. Focus on the symptoms in an effort to identify quick fixes that may or may not address the root causes.
Community Leaders take an active part in the lean community and are very visible at educational and networking events. Laggards don’t have the time, or money, for attending lean educational and networking events.
Coaching Leaders understand that techniques from the lean tool box are systematic and most effective when people are coached on how to use them correctly. Laggards learn by skimming articles and viewing a few webinars. They have a very cursory understanding.

Lean transformation takes discipline not shortcuts. Great article, Mike!

Wanna Get Lean? Get Mean About Wasted Time, Effort, Production, and Transportation!

Apparel Magazine just ran a great article on “developing leaner product development and sourcing operations” for anyone looking for an easy to understand no-nonsense common sense introduction to going lean. Focussed on correcting the six-lean sins of the product development process in an average organization, the article did a great job of pointing out that if you are wasting time, effort, production, or transportation, you are not lean.

More specifically, a lean organization does the following.

  • Optimizes Time Utilization
    A lean organization identifies those parts of the cycle that take the most time or that tend to run out of control and reins them in with proper processes and controls. In supply management, if the longest part of the process is identifying suppliers who can meet certain needs, then, even before a product design is finalized, the process to identify suppliers with the requisite technical capabilities and production processes is begun. Then, when the design is finalized and the components need to be sourced, the organization simply needs to select the most appropriate supplier from a small pool.
  • Optimizes Effort
    As highlighted in the article, a lean process does not include unnecessary milestone meetings, [a] lack of communication between departments that leads to a re-creation of plans, [the] development of too many designs that do not get adopted, or the creation of unneeded samples. The requirements for a project are clearly identified and all efforts are aligned with meeting those requirements.
  • Optimizes Production
    There are three optimizations here. First of all, the organization avoids producing more units than are needed (in a given period of time). If the known demand is 100, 1000 are not produced in the hope that the need will magically appear. Secondly, the organization does not add features or functions that are not required by, or do not add value to, the end customer. Third, the organization avoids the creation of process silos to insure that one individual or group doesn’t over-engineer a part or value-add service that goes (well) beyond need or cost control requirements.
  • Optimizes Transportation
    This applies to all steps in product design, development, and distribution — not just the final distribution process. For example, sending partial products back and forth needlessly in the design and development process due to poor process design is waste. In production, if raw materials are transported from Africa to South America for refinement and then shipped to China for component production and the components are then shipped to the US for final assembly, that’s just inefficient, especially if the final products are then sold in Europe. That’s losing sight of the supply management forest while focussing on the old cost trees.

Lean is not a mystical, magical, chimera. It’s the systematic elimination of waste by taking a holistic view.