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42 SMT Magazine • July 2015 models and options, work with your partners in the supply chain to figure out how to best deal with this additional variation. Provide data to help predict the most likely options, whilst un- derstanding what can be built as a platform and what needs to go through the line in isolation. Mitigate Risk Wherever Possible Of course that's an obvious thing to say, but risk by its very nature is unpredictable. A sup- ply chain needs to be ready for risk and a panic response to a supply chain disruption will be expensive. There are plenty of things that can be done to mitigate risk and reduce the cost of corrective action when the unexpected does oc- cur. The important thing is to have a risk miti- gation strategy, not a risk migration one. Many companies seem to think if they pass risk onto their suppliers they are mitigating or reducing their risk; that may be the case financially, but it will come at a cost. And if the outcome is that a problem occurs and your supplier is liable, you will still have that problem, along with all the associated stress and brand damage. Some supply chain disruptions will come out of the blue, like Fukushima or the Thailand floods, both of which had a severe impact on supply chains. However, in these cases, as is in many others, some supply chains suffered more than others. Those that were single-sourced suf- fered more. Those with the least visibility suf- fered more. And those with the least agility and flexibility suffered more. "Plan for the unpredictable" may be a glib phrase, right up there with 'failing to plan is like planning to fail', but as with most glib phrases there's something to be said for consid- ering their tenet. This isn't unlike my forecast- ing comments earlier; you may not be able to see the future, but you can review the past. Do you have a plan that can be swiftly executed? Do you have contingencies in place? Lastly, look at the supply chain in terms of its vulnerability. A robust supply chain will have multiple sources for most components and ser- vices, and it will have goods in stock, preferably consigned by the vendor, to support any inter- ruption. Build a robust supply chain and moni- tor it dynamically, making sure you have con- sidered as many what-ifs as you can and you have enough flexibility and agility to deal with them. Finally, keep your fingers crossed that the things you've considered are the things that go wrong. Be ready for surprises. you Can't Fix What you Can't Measure Visibility and traceability are at the very center of a good supply chain. The visibility is needed to allow the supply chain to flex as things in the market and within the supply chain change. Traceability is needed to en- sure that when something goes wrong you can trace the problem right back to source and fix it quickly. The performance of every part of the supply chain needs to be measured if it is to be im- proved. This is true of cost, quality, speed—ev- erything. If you do not have performance in- dicators it is highly unlikely that you will be able to improve performance or make savings. In fact, if you don't measure the right things you'll merely fix only what you measure. If you pick a single KPI (key performance indicator) and measure your vendor by that, it will be that statistic that they work to improve. What you need is a holistic approach that mea- sures the entire supply chain, showing the im- pact of one part on another. There is no point in changing a device to reduce the BOM (bill of materials) cost if it results in a more complex assembly process, a longer time in test, or worse still a failure in the field. If you only measure the BOM price, this will happen, and the results will not be what you had hoped for! FeAture CuTTING COST, NOT PRICE continues