Industry 4.0 • May 26, 2022

Smart SMEs Are Proactive Value Chain Partners

Today’s post-pandemic economic constraints are challenging all businesses, but small to medium-sized enterprises (SMEs) are especially impacted.  Without the economies of scale, SMEs may seem limited in the ways they can respond to the demands put on them by their customers. Rather than being reactive when challenged by their customers to deliver more value, smart businesses are looking to technology to become proactive in driving value. And by stretching their technology architecture beyond competitors, these businesses are gaining an edge over less technology-capable competitors. By digitally transforming their operations these SMEs are driving value in several competitive ways.

Faster Response to OEM Demands

With high visibility into their operations, thanks to accurate insights provided by their digital systems about current production capabilities, these businesses can provide faster and more reliable responses to OEM inquiries regarding price, quality, and delivery when OEMs request parts releases within existing agreements or on new orders.  Better information permits tech-enabled suppliers to automate responses to inquiries and become more tightly integrated into the value chain. This makes them a preferred supplier over suppliers that take too much time to commit and deliver.

Collaborating on Parts and Processes

With the right technology, an SME can offer the OEM not only physical products but also become an integrated part of the OEM’s overall product design and production processes.  Electronically sharing design information can enable the supplier to offer up suggestions as to better ways to produce a part, such as using additive manufacturing instead of casting or machining for small quantities.  When an OEM is willing to share the larger picture of how the materials are consumed, smart suppliers often can show how to reduce assembly steps.  One example is where two parts are sourced from separate suppliers and then fastened together to form an assembly. With bi-directional transparency, the smart supplier can often show how they can provide an assembled unit at a lower cost. Then the OEM can buy the two parts and assemble them on their own.

Going Paperless to Drive Efficiency 

By being proactive from a technology standpoint, an SME supplier can deliver value beyond just cost savings in the part itself.  One example; by electronically sharing detailed quality information, particularly on serialized parts, you can demonstrate to the OEM how you can save them time and money on incoming goods inspection. Likewise, you can show the value by compiling the documentation package that may be required for regulatory or customer genealogy requirements.  Going paperless also lessens the costs associated with lost paperwork.  No more holds on production because of missing documentation.

How to Be Technology Proactive

Many SMEs want to modernize their technology footprint, but given today’s tight economy feel the timing is off.  Fortunately, when it comes to operational technology platforms, like MES software, a richly featured solution can be achieved with a pay-as-you-go approach. Deploying software as a service (SaaS) rather than having to lay out capital to implement a big project to modernize may make strategic sense. An MES, delivered via a subscription service (particularly through a vendor that has designed their product around a modular, microservices architecture), allows people to deploy functionality at a pace they can manage. As long as the subscription pricing is value-based, you can deploy what you need when you need it. Don’t wait for your customers to push you to modernize your OT infrastructure, be tech-proactive and distinguish yourself from the competition.

Innovation Insight for the Connected Factory Worker

Carlyn Greco
About the Author

Carlyn Greco

Carlyn Greco is the Senior Content Marketing Manager at iBase-t. Her experience is rooted in years of listening to and sharing the needs of both software providers and manufacturing operations. This offers a unique perspective and the ability to speak to the collaboration possible between the two.

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