Christmas For Manufacturers

Florian Seebauer

Ho ho ho! Christmas is approaching with big steps. Are you getting nervous? Do you have all your gift shopping for Christmas done?

In my case, it is quite easy: I got the first reminder in October, when the supermarkets in Germany started to offer lebkuchen (also know as gingerbread) in their stores. Since early November, my young kids have been listening to Christmas songs on the radio and drew up their wish lists. In late November, the traditional Christmas Markets opened in every city, and the streets have been adorned with holiday decorations.

But it’s not just families who have been worried about the holidays — many manufactures are stressed about any special shopping days, including Black Friday and Cyber Monday. They need to get the new toys for the small and big children into the stores on time.

In this blog, I will share some insights about how discrete manufacturers can get their products to market faster, hit their cost targets, and delight their customers.

Breaking down internal silos

In many organizations, the engineering team works in the product lifecycle management (PLM) system without engaging the sourcing and procurement teams in the early stages. Breaking down these internal silos by connecting the PLM system with the sourcing solution brings these two stakeholders closer together and fosters and speeds up internal collaboration.

Involving suppliers early in the design phase

The integration of the PLM system with the sourcing solution provides you with an additional huge advantage – it opens your internal collaboration to your suppliers. This has multiple benefits.

Engineering can get instant feedback from suppliers and contract manufacturers regarding the cost impacts of certain capabilities or design choices. Considering that 70-80% of costs have been determined by the time the design is completed, cost avoidance during the design phase is essential. Nowadays, it is not enough to focus just on cost reduction after the product is in the market. It is 75% more expensive to make engineering changes after release to production.

The winning recipe for driving down costs is the combination of early cost avoidance and resourcing selected components after market introduction.

Additionally, early collaboration with suppliers allows engineering to multiply their innovation power by tapping into their their supplier base’s innovation capabilities.

Finally, the sourcing team can involve other suitable suppliers in the new product design (NPD) or new product introduction (NPI) process to ensure that suppliers provide a competitive price for their components and services.

Supplier due diligence and supplier risk monitoring

Adding supplier management and supplier risk capabilities to the NPD and NPI process will allow you to evaluate suppliers based on their intended contribution and categorize them accordingly. It will ensure that all required certificates are available and that suppliers’ and supply chain risks are understood and monitored during the full lifecycle of the product.

Sharing sales and production forecast information

Including sales and production forecast information in the NPD/NPI process provides the supplier and contract manufacturer with important information to plan and reserve capacity. During a competitive sourcing cycle, it might be easier to convince a supplier to reserve the requested capacity to win the business.

Finally, listen to your customers

Understanding the sentiments of your customers related to your brand and your product is key, and they must be collected, analyzed, shared, and considered in the product design process. Experience management is the process of monitoring every interaction people have with your product and brand in order to spot opportunities for improvement.

Listening is a good idea in general – listening to your loved once during the year is quite helpful to get inspiration for a thoughtful Christmas present.

If you need some inspiration for improving your manufacturing supply chain, please visit the Solutions for Discrete Manufacturing page on sap.com for more information.


Florian Seebauer

About Florian Seebauer

Florian Seebauer is Senior Director of SAP Ariba Solutions for Direct Spend at SAP. Drawing on his 20-year experience in strategic sourcing, procurement, and supply chains and passion for helping organizations improve direct spend, Florian is responsible for the go-to-market strategy of SAP Ariba Strategic Sourcing Suite and SAP Ariba Supply Chain Collaboration solutions.