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© Evertiq General | September 20, 2018

Supply-chain issues? It could be avoided you know…

As concern about component material supply deepens, along with the trend of increasing ingress of counterfeit materials, factories are right to be worried about how to maintain the smooth operation of their business.
The last time material shortages happened, factories had to slow down or even stop due to lack of materials and on recovery, found that needed materials had in fact been there, but were invisible to ERP. As over-supplied materials became obsolete, re-labelled, or re-manufactured, counterfeit materials appeared, threatening quality.

Now listen to this; Michael Ford, Sr. Director Emerging Industry Strategy at Aegis, claims that Smart, digitalized factory operations create opportunity for the Smart and reliable supply-chain with existing ERP, which could then eliminate needless effects of material shortages. Quite the statement. Evertiq reached out to Mr. Ford to get more details on the claim.

The big question here is, how could an existing ERP aid a company in eliminating the problems that we’ve seen with material shortages and counterfeit components?

Well, according to Mr. Ford the main challenge on the material shortage issue is gaining accurate knowledge of the quantities of internal material inventory, saying that only when actual material usage, spoilage and allocation information is fed back in a timely way, will ERP and MRP know exactly what materials are available, and therefore will be able to accurately calculate additional materials needed going forward to satisfy upcoming work-orders, as well as to work out which work-orders can be executed without risk, using existing materials.

Michael Ford explains, “Only through the use of a modern digital MES system, that connects with all production processes, gathering data as they operate, which provides such accuracy and dependability of material consumption data, making it an essential add-on to ERP going forward. ERP and MRP tools are there to work, but can only work as well as the completeness of the data with which they have been provided.”

“As part of the same digital MES solution, traceability information is obtained almost as a by-product, which can be utilized to ensure that any counterfeit material incursion is traced back to the source. Within the traceability data, each instance of material used is linked back to the package in which the material was received. The use then of a secure supply-chain process, for example using blockchain to track incoming material logistics with secure, tamper-proof labelling, can pin-point any ingress of counterfeit material further up the supply chain, back to the responsible party.

OK, but then if we’ve had access to this technology all this time, how did we get to where we are now?

“As ERP encourages a ‘push’ operation of materials, the transition to the ‘pull’ system can be quite a significant change, especially where data acquisition across all processes has been previously limited,” Michael says and continues; “Using advanced MES with, for example the new IPC Connected Factory Exchange (CFX) IIoT interface, ensures that detailed data from all machines is always available to a consistently high standard.”

In your opinion, what are the three key factors that companies need to keep in mind to run their operations as smoothly as possible in the times of material shortages?
  • Accountability for every piece of material – even an absence of the tiniest passive component can prevent the shipment of a product.
  • The factory has the flexibility to adjust operations in line with opportunity coming from customers and material availability.
  • There is clear visibility of the progress and status of the operation, for internal optimization, as well as customer and supplier feedback.


Michael Ford will present a paper entitled Supply-Chain Issues? Smart Factory Survival Guide, at TEC Lund – which will take place at Medicon Village on September 27, 2018 - for more information about the event click here.

The paper focuses on how Smart, digitalized factory operations are essential in addressing concern around increasing trends of material shortages and ingress of counterfeit materials, whilst maintaining continuous high-quality production.
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December 05 2018 3:01 pm V11.10.4-1