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The 2011 disaster in Fukushima, Japan, during which an earthquake and tsunami led to a meltdown at a nuclear power plant, caused a major supply chain disruption for Jabil, a contract manufacturer with more than 100 facilities around the world.
It took the company six weeks to account for the losses caused by the supply chain disruption, which was unacceptable according to John Dulchinos, Jabil vice president of global automation and 3D printing. To mitigate future disruptions, Jabil used supply chain visibility software to build its Intelligent Digital Supply Chain (IDSC) and gain end-to-end visibility into its huge network of suppliers.
The supply chain visibility software proved its value last summer when it helped Jabil deal with the effects of an earthquake in Italy.
"Within 10 minutes, the system had comprehended the earthquake, had comprehended the totality of the suppliers that were impacted and had disseminated down what the risk profile was of the supplies coming out of that supply chain," Dulchinos said. "It then sent all of that stuff in texts and emails to the supply chain managers in the company who were impacted by that event. So that kind of response, to be able to understand within 10 minutes and start to put into practice mitigation strategies around an event, is all because of that interconnected level of information that we have."
Inside Jabil's supply chain visibility software
Dulchinos provided a closer look at how Jabil improved visibility with the IDSC and detailed some of the benefits supply chain visibility software provides for the company.
He said the IDSC was built on Jabil's single-instance SAP ERP system, which allows the company to "aggregate data faster and more elegantly than it could do otherwise."
Jabil is a global contract manufacturer that serves more than 250 well-known brands, with a complex supply chain that involves more than 25,000 suppliers and over 100 manufacturing plants.
The IDSC provides end-to-end, real-time visibility and actionable insights over the supply chain network, according to Chuck Conley, director of product marketing for Jabil's digital supply chain solutions.
The visibility starts with assessments in the early product design and prototyping stage, where potential risks and opportunities are identified. These assessments provide engineering, sourcing and procurement teams with information about parts and component lead times, commodity clusters by geography, sole-source suppliers, compliance and other issues that can affect product introductions.
Accessing information and views of material flow from the raw materials manufacturers to the delivery of end products allows Jabil to identify and take action on opportunities and to mitigate supply chain risks.
The fact that Jabil built the IDSC supply chain visibility software on its SAP ERP platform allows the company to take advantage of its deep domain and manufacturing industry expertise, according to Conley. Data from SAP and other applications and data sources are fed into the IDSC, including sensor, enterprise, financial, manufacturing, transportation, weather and other third-party data that is collected and analyzed to provide supply chain insights.
How has supply chain visibility software helped Jabil? Conley explained that in October 2016, two days before Hurricane Matthew hit Melbourne, Fla., Jabil's supply chain team received system alerts about potential supply chain disruptions at component manufacturers located in four cities within the storm's primary impact zone. Based on the IDSC's real-time risk analysis, Jabil surveyed the impact data and, within 30 minutes of the storm hitting land, identified five affected component manufacturers.
From there, a supplier analysis revealed that nearly 500 parts were affected, with 28% of those having direct revenue impact. Of these affected parts, 65% were multisourced, and could then be purchased from another supplier, while 35% were sourced from a single supplier. Jabil then used the IDSC supply chain visibility software to provide affected customers with alternative sourcing and procurement options to avoid any disruptions.
The hurricane affected 69 Jabil customers, but only two experienced an actual impact, and they were able to work with Jabil to seek alternative sources.
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