COVID-19 has highlighted how critical supply chain diversity is to hedging against enterprise risk. South-east asian manufacturing has dominated for the last 10+ years due to low wages, improved quality control, and consolidated shipping lanes. However, recent geopolitical and environmental turmoil has put supply chain diversification at the forefront of leader's minds.
Simply put - supply chain diversification is the practice of distributing your production supply base across multiple manufacturing partners. Obvious benefits of supply chain diversification include: minimizing risk of a single manufacturing plant going offline, being able to run a competitive RFP process and drive down operational costs, and having the ability to scale up production at any given factory if load volume increases.
But in this process you lose a few key things: the convenience of having a single manufacturing point of contact, a quick understanding of production visibility (where the bottleneck is, etc), and perhaps most importantly, the simplicity of having your contract manufacturer coordinate your upstream supply chain.
The complexity of unified vs diversified supply bases can be easily visualized in the diagram below:
As shown - in a single supplier model, you can typically offset management of upstream supply chain partners to the sole contract manufacturer. They'll typically become responsible for sourcing raw commodity goods and ensuring that those goods get to the factory on time. This model loses its advantages in industries where the brand demands visibility or commitment to upstream sourcing (e.g. companies like Bombas caring about the origin point of their sock fabric, Patagonia taking a corporate stance on ethical sourcing, or Everlane highlighting exactly which factories they source from). More often than not however, engaging in a single supplier model vastly simplifies production operations.
Conversely, if you have a diverse supply base and have an agreement with your main contract manufacturer that you'll be responsible for upstream supply chain coordination, you're guaranteed to have more operational overhead than a model where the manufacturer takes care of that coordination.
Historically - brands have thrown people at this problem. Project managers, production managers, supply chain coordinators, and a number of other poor souls become responsible for coordinating and executing a production plan as your supply base grows.
This becomes particularly tough when you're bringing a new product to market during the new product introduction (NPI) phase. The New Product Introduction (NPI) portion is traditionally the most operationally complex part of a brand's lifecycle. You not only have to align internal stakeholders (across production, supply chain, quality, sourcing, marketing, sales, and leadership), but also have to keep your contract manufacturing base in the loop.
During this process, a production manager, launch manager, or new product development leader will typically set out a production roadmap or developmental WIP (work-in-progress). This is traditionally tool meant to be passed around among internal stakeholders and your CM base to promote transparency in the launch process.
As you increase the number of contract manufacturers you work with, you increase the number of hands interacting with a production roadmap or developmental WIP. You have to track overlapping dates and make sure all milestones are being met from every single supplier every time a change is introduced to the supply chain - be it a complete new product, or new material/manufacturing methods. This level of visibility is critical to ensure that production deadlines aren't missed due to unforced errors.
Modern teams will try and use a project management system like Asana or JIRA to coordinate all moving pieces. These systems lack in how well they fit the use case: they force you to implement a lot of process in order to make them work for your specific workflow. There's no process in place to invite your external stakeholders (contract manufacturers) into your workspace without showing them your full hand. You're also left unable to effectively connect to your other systems of record (PLM/ERP systems) to your workflow software, often leading to double work being done.
In today's world of diversified supply chains and international travel at a screeching halt, it's difficult to efficiently travel to your supply base throughout the product launch process. At Workbench, we believe that operations as complex as new product launches deserve a piece of dedicated software.