PPS Group

Our supply chain consists of procurement, sales, logistics, and planning departments. Although our setup is uncommon in that sales fall under the supply chain, it generally works well for us.

In light of your experience, what are the major pain points that your clients are facing in the manufacturing technology space and how is your company taking steps on resolving these issues?

The conflict in Ukraine and the power crisis in Europe are currently affecting the global markets, which is disturbing the whole supply chain as well as the material production and logistics from Asia to Europe and the US. For the majority of original equipment manufacturer (OEM) customers, planning became incredibly difficult. Since everything they produce is made up of hundreds or thousands of pieces, missing any one piece logically prevents you from selling or shipping the product. As a result, the majority of businesses have crowded backyards filled with unfinished goods. The current challenge is synchronizing all the suppliers who are supplying the parts for your vehicles, tanks, and machinery.

Electronic data exchange (EDI), or any collaborative planning tool that allows you the flexibility and information required by the client, to the ultimate customer, is the answer to this problem. They can see what components are available in, say two days from the time they check, if they can physically access your inventory and warehouse. They can at the least create an assembly schedule and have a rough notion of what has been decided upon, invoiced, and how cash flow will be supported.

To summarize, it has become very challenging to obtain all the goods on time, much alone estimate when you will receive them, because of supply chain disruptions, the crises we are currently experiencing, conflicts , power crisis, semiconductor shortages, and more. To feed the consumer when they need it, the task is to arrange production and procurement as efficiently as possible. We must be incredibly flexible throughout the whole supply chain, from a material supplier to logistical partners, even though it is not particularly predictable. Naturally, one's internal production must also be highly effective and must deliver depending on the demands of the consumer. It all comes down to timing your output with the demands of your clients. This is accomplished through the Internet of Things, collaborative pipeline, or another moniker for this information flow.

As the supply chain director at the PPS group, how do you envision the future of the production and supply chain management space?

I'm not sure when the future begins, if it does so tomorrow or if it has already begun, but I do know that after all these battles and crises, we will need some time to heal our wounds, and the future will undoubtedly be influenced in some way by the present. The ability to make quick decisions and changes to your production to provide all necessary support to your customers, which will cut across the entire supply chain from OEM or the final customer to raw material production, will depend heavily on online information sharing and EDI in the future. Preventing the transportation and logistical difficulties that we are currently experiencing, let's say lost three or four years before we hit Covid and all those things, will be crucial.

Everyone is aware of its shortcomings, yet I am unable to see any other alternatives. Either you have a second source, you don't rely solely on sources in the far east, such as China, Korea, or any other country in Asia, or you have a local warehouse, let's say one in Europe, where you can obtain what you need for at least a few weeks.

To avoid material shortages brought on by natural disasters like the typhoon that hit Korea in September, it will be necessary to spread out local inventories, which will allow you an additional three to four weeks for the material you bought. The globalization of supplies or inventories will be one of the things and online information sharing, whether it's EDI or any other kind of organized information sharing.

Is there any particular project initiative that you have been working on at your company, and how is it making a difference in the supply chain business?

We have several projects, but I'd probably just discuss two. The base stabilization of our material sources comes first. Typically, we work with a huge variety of providers. As a result of the conflict in Ukraine and the market disruption we experienced in March and April, we have essentially stabilized contact with fewer suppliers while communicating more frequently. This has allowed us to have better and more stable planning, let's say six weeks to six months ahead. Instead of taking, say, four to six weeks, everyone is now generating something thanks to extremely close contact and information exchange with our suppliers, as well as a very skillful and cautious blending of their talents.

"The globalization of supplies or inventories will be one of the trends, and online information sharing, whether EDI or any other kind of organized information sharing, will be pivotal in achieving desired outcomes" 

Even if there is an overlap in custom supplies, we made wise choices when choosing a portion of those suppliers, allowing us to lower the size of our warehouse and facility since we are confident in their ability to supply and have more effective planning.

On the other hand, because they are confident in their ability to sell a specific volume, it is a win-win situation. To be able to bargain based on quantities, you must undoubtedly have some competitive advantages. We have fewer suppliers thanks to our supply chain's redesign or reconstruction, but it is more flexible and predictable than before, with more stable prices and, of course, loyality.

That particular project is now complete, and the results are now becoming apparent. It truly works. We have much more production flexibility due to the improved material availability, and we don't have any missing parts, which is crucial for us. On the other hand, our suppliers are content and steadfast since they are aware that we buy regularly, in regular quantities, and at win-win pricing every month.

The second project we're beginning right now is more concentrated on our internal planning. Although it is not a very novel idea and is a pretty popular tool in the automotive industry, it will significantly increase our production and inventory efficiency, and we anticipate larger volume availability. What I'm referring to is the process audit to identify bottlenecks and standardize material flow operations. We want to reduce industrial waste, and avoiding overproduction. Our attention will be on our internal effectivity. We'll be able to deliver more to the clients while using the same number of employees and machines.

The output will be greater even though the research will likely remain the same or maybe undergo minor changes. Again, the supply chain will benefit greatly from this since internally, the material will be moved more effectively and predictably.

In the industrial setting, you may either use a push system or a pull system. We must take these factors into account as well, but for us, whether we push or pull, the goal is to produce with very high effectivity in production. Since it focuses more on production effectivity than the supply chain as a whole, it presumably has less of a direct relationship with it. But it provides us with a lot more and better control over internal material flow, which is the supply chain again. It improves the customer's access to online information regarding the availability of the product.

Before we wrap up, would you like to share a piece of advice from your experience, with other senior leaders and CXOs working in the space so that they can extract the full potential of supply chain analytics and can improve in this case?

What works for me is just to have your ears and eyes wide open. There are many great concepts all around us. It's OK if you're conservative, but you don't make as much progress that way. We are living in a highly busy and dynamic period; practically every month, things change. Globally, your circumstance varies. Avoid being overly cautious and don't be afraid to take a few inventive or daring steps. Although you may exercise extreme caution, there isn't much that can be altered because everything has already been developed.

You need to be creative and have the courage to defy the status quo. Another thing that works for me is when I listen to people from the shop floor that is the doers, not the thinkers. If you ever get the chance, visit a warehouse, dock, loading pad, or any other place where people work. They always have great ideas since they aren't distracted by academics or theories. They're simply pragmatic individuals. Don't be afraid to engage in conversation with workers. They might be full of brilliant ideas.