Sourcing

A key stage in most industrial supply chains is sourcing. This may include finding and securing services, products, components or even raw materials which may be based locally or abroad.

This is an aspect of the industrial supply chain which requires the investment of both research and time to find the best return on expenditure. One exclusive or multiple suppliers might be added to the chain, or products once made in-house could be outsourced to cut costs.

Siemens’ Electronic Supplier Integration Program (ESI+) project was designed on the basis that many of the firm’s trading partners were still relying on fax, phone and “snail mail” to operate.

ESI+ brings these partners into the digital era by modernizing the critical communication required in sourcing, providing suppliers and partners with a ready-made platform for accessing business-critical data including dates, orders and purchases.

Siemens says that the program has reduced errors in manual processes and has the potential to boost supply chain efficiency across the board.

The sourcing and supply relationship in retail can be complex when products from various vendors are sold by other parties, particularly when the retailer in question manages $32 billion in inventory and over 11,000 stores.

To keep track of this sprawling empire and the flow of goods into warehouses and stores, Walmart launched its Vendor Managed Inventory (VMI) supply chain initiative. It gives manufacturers responsibility for managing their own stock that’s transferred to Walmart warehouses.

Order fulfillment

Reduction in out-of-stock problems

This project was followed by investments in smart RFID tags, and employees later became equipped with smart scanners to further improve the tracking of goods from sources through the supply chain. These act as mobile IoT nodes which send data back to controllers to make sure sourced stock is ordered or already in inventory.

As a result, Walmart now expects close to 100% order fulfillment and there has been a 16% reduction in out-of-stock problems. The retail giant is now investing in automated re-ordering systems.