“We start with the customer in mind,” says Stan Woszczynski, chief manufacturing officer at engine manufacturer Cummins. This requires “understanding what they need, not only from a product standpoint, but also a lead time and perhaps even packaging standpoint. Then we make sure we select suppliers appropriately, matching lead time and quality levels. To manage suppliers, we make sure they are doing what we need them to do, to ensure their product is sustainable to us.”
To remain competitive in such an automated, competition-flattened world, “supply chains need to be flexible, agile and tailored to the customer needs,” says Maria Crowe, president of Indianapolis-based Eli Lilly & Co.’s manufacturing operations. “
To make its end-to-end strategy even more effective, Cummins also strives to optimize transportation, freight and duty to improve productivity and cut costs, Woszczynski says.
Manufacturers should adjust their end-to-end supply chain structure according to where products are ultimately sold, says John Lundgren, chairman and chief executive officer of tool maker Stanley Black & Decker. The company opened a new manufacturing facility in North Carolina last year because “localizing our footprint makes us more responsive to our customers’ needs,” he says. “Our end-users are hungry for power tools that are built in the USA, and we’re the only company that is able to deliver those tools.”
For emerging markets, SB&D recently developed new manufacturing capabilities to introduce a new line of tools specifically aimed at the needs of China or a similar country, rather than simply modifying tools that the company manufactures for more developed markets, Lundgren says. “The needs are truly different and the ability to design and manufacture tools in the markets where they are sold is a big [competitive] advantage.”
Crowe, Woszczynski and Lundgren are all speaking at Chief Executive’s Smart Manufacturing Summit, April 28-30, 2015.