Value Chain Synchronization Improves Performance

Deloitte Research, in a study titled Mastering Innovation, found that today’s most innovative companies are conquering the complexities of the global business environment by building the capabilities necessary to synchronize product development, supply chain and demand-creation activities across their value chains. These companies consider this a strategic management initiative rather than simple tactical connections and point solutions aimed at cost reduction. In another study (Mastering Complexity in Global Manufacturing), Deloitte notes that companies that can synchronize their value chain can achieve 73 percent higher profit margins than those that don’t.

An AMR Research study (Insights into Supply Chain Innovation in Europe) also notes the significance of effective value chain synchronization, stating that value chain innovators see a reduction in finished goods inventory greater than 30 percent and a 25 percent improvement in on-time delivery.

PLM Enables Synchronization

It’s clear that companies must implement supply chain management solutions in order to remain competitive, but supply chains alone do not significantly contribute to agility, collaboration and innovation. They must include the right members and the right tools to function as value chains and innovation networks

Successful innovators are bringing all of the contributors and stakeholders of product development – customers, partners and suppliers, as well as internal departments, more closely into the product development process, including functions from procurement to design, engineering, manufacturing, marketing and service.

The challenge inherent in this process arises from the layers of complexity, uncertainty and risk that build as these functions are spread across multiple organizations and geographies. Without the tools and information needed to manage these relationships effectively, companies easily have the potential to lose control of costs, quality, time to market and inventory.

PLM solutions address this challenge by creating a virtual enterprise environment for collaboration throughout a value chain. They create a single source of accurate, up-to-date product and process data that can be continually updated throughout the life of a product. With access to this information all participants in a value chain can make valuable contributions as well as be more efficient and productive. At the same time, this environment gives companies the visibility they need to manage their complex value chains and plan for success in local markets worldwide.

Incorporating PLM within value chains can create an enormous advantage for companies of all sizes. I encourage you to learn more about how synchronized value chains can contribute to profits and growth by visiting the Value Chain Synchronization page on ugs.com at http://www.ugs.com/initiatives/valueChain/ . There you will find an in-depth white paper (Enabling Innovation Through Value Chain Synchronization), analyst reports and articles on this topic and a variety of case studies from successful companies in a wide range of industries such as Procter & Gamble, Lockheed Martin Aeronautics, Callaway Golf, Palm, Inc. and Fiat Auto S.p.A.A. among others.

Companies that are able to manage the valuable resources within their innovation networks create a competitive advantage in any market where they do business and the symbiotic relationships that result can continue to build and sustain that advantage as they contribute to ongoing product and process improvements over time.