Improving the Supply Chain Through PIM
In the business world, product information management (PIM) is arguably more important than ever, given the current economical situation and the fact that PIM can help to both improve quality and timelines.
The importance of PIM was recently explored in an article by Ed Hammond in the Financial Times, which noted that, as companies travel increasingly far afield to help "strike a balance" between the quality and price of materials, the need for an efficient supply chain is essential.
Simon Chard, director of contract risk and compliance at the consultancy Deloitte, explained that eliminating risk is of the utmost important in the current climate and can be the difference between success and failure for all firms, including those in the pharmaceutical sector.
"Companies used to very much be of the mindset of 'who are you, and why should we do this?' but, over the past two or three years, people have started to take the issue of managing the potential risks in their supply chains much more seriously," he explained.
His comments have been reiterated by a number of supply chain experts, who noted that it is vital to keep a close eye on the financial health of key suppliers of products, as well as tightening security around intellectual property and data which may be sensitive.
Andrew Spence, supply chain business development director at Oracle, the information services group, says that the right product information management systems can help to "mitigate" the risks associated with working with a long list of foreign suppliers.
He noted that many organisations are now turning to a combination of technology and risk management professionals to deal with the complexities of purchasing materials and business services, given the worldwide landscape of supply.
The expert explained that such systems can "provide a mechanism" for sharing product information to ensure everyone is working to the same specification and that product quality is measured.
However, he added: "Technology alone can't solve the potential risks of working with remote suppliers. Companies must build close relationships and trust with a supplier, and this can't be achieved without face-to-face meetings."
"Software technology enables and supports the opportunity to work with remote suppliers, but without human contact, organisations will stumble in the early stages of working with the supplier," he adds.
Lance Taylor, chief executive of Rider Levett Bucknall, said that companies need to have a "culture of understanding and knowledge".
As a purchaser, it is important to need to have somebody "on the ground" who understands the market, supply chains and culture, he noted.
One anonymous manufacturing executive told the FT that suppliers will constantly strive to move up the value chain and offer a wider range of goods and services, but in turn these organisations need to alter their risk profiles to reflect their greater exposure to problems.
"A lot of companies will outsource the work you have contracted them to do, meaning you have hidden exposures you really cannot factor in," he stated.
Mr Chard concluded that, although having a more globalised supply chain can be beneficial economically, this brings additional risks including financial instability and production problems, and it is vital that these are minimised through developing more efficient systems.
"As the supply chain grows and the goods and services become more complex and intricate, so the ability to manage the chain becomes much harder. It is also hard to have technology to support risk management when the supply chain is so disparate," Mr Chard explained.
For many of these organisations, having the correct product informational management systems in place to helpreduce timelines and improve quality and efficiency may be the difference between success and failure.