Adding value to supply chains
Adding value to supply chains
“Accredited certification has consistently added value to the supply chain over the last three technological revolutions. In the next decade, the accreditation and certification industry will need to rise to the challenge of dealing with rapid change - fostering the acceptance of new technologies and the accompanying uncertainties.”
Ishan Palit
Member of the Board of Management, TÜV SÜD
Sunday, June 9, 2019
The term “Supply chain management” was first introduced in the public domain in 1982 and has grown increasingly important and sophisticated over the last 30 years. Globally recognised standards and accreditations have developed in parallel, adding value to the supply chain by providing a globally aligned basis for trade.
June 9 marks the World Accreditation Day, an annual global initiative to raise awareness of the importance of accreditation across different industries. This year, the focus is on how accreditation has added value to the supply chain.
We are at the cusp of the industrial revolution of our time, commonly known as “Industry 4.0”. In the next few years, cutting edge technologies fuelled by connectivity and advanced analytics will bring about unprecedented levels of productivity and efficiency. However, what does this mean for the supply chain?
Gaps in the supply chain are almost as old as the manufacturing process itself. Advances in technology are expected to close these gaps and resolve issues which were deemed logistically challenging. However, a seamless supply chain would also bring about a new dimension of risk to all players. The role of accreditation and certification would be key to fostering the acceptance of new technology by all players globally.
This World Accreditation Day, let’s take a look at how technological advancements can add value to the supply chain, and how quality infrastructure can enable this.
Supply chain transparency is one of the greatest concerns for businesses and consumers around the world. The challenge is further exacerbated by the growing complexity of the supply chain as businesses strive to source for low costs suppliers while meeting consumers’ demands for environmentally friendly and socially responsible products.
In many industries, the supply chain seems incredibly long – to the point that achieving true transparency and traceability can seem like a very daunting task.
For the food industry, supply chain transparency is no longer just a “good-to-have” but a business imperative, stoked by the urgency to contain food contamination when it occurs. Thankfully, the applications of blockchain technology in the supply chain could nip this issue in the bud. In a nutshell, blockchain technology enables different parts of the food supply chain to share details in a single ledger and updated through consensus. This allows players to create blocks of data that are time-stamped and chained to one another. The blocks cannot be altered, making an immutable digital ledger. Blockchain technology has the potential to eliminate information asymmetry – bringing us closer to a future where a scan of a product label shows a customer its journey from field to store.
With World Food Safety Day coming up on June 7, the world has never been so eager to know what is on its plate – and how it got there.
Blockchain-powered initiatives have seen tuna tracked from ocean to table and counterfeit wine imports thwarted. Major retailers, such as Starbucks, Domino’s and supermarket chain Walmart, are piloting wide-reaching blockchain projects.
Regulators such as the United States’ Food and Drug Administration (USFDA) say they are considering implementing blockchain technology in new traceability programmes.
Implementing globally recognised standards is crucial to foster the acceptance of such innovations by all players globally. Companies who are in the dark when it comes to applying new technology – but are open to adherence with rapidly evolving regulations and industry guidelines – would look to the accreditation and certification industry for guidance.
Globalisation has proven to be a boon for all sorts of companies, allowing manufacturers to source parts and components from all over the world, often at low unit prices.
However, as lucrative as this business model can be, it is far from bug-free. Long delivery lead times can cause inefficiency. Poor demand forecasting is always an issue, while finding unique parts can be costly and time consuming. For industries in which availability is a crucial factor, the timely replacement of parts is essential to reduce downtime.
This is where additive manufacturing comes in. Additive manufacturing, also known as 3D printing, is the process of creating physical objects from a digital design. Additive manufacturing enables unique designs to be produced in lot size one, significantly reducing inefficiencies across the supply chain. By applying additive manufacturing methods, companies can commission trustworthy and otherwise hard-to-obtain components and finished goods from production facilities near to the places where they will eventually be put into operation – ensuring consistency and reliability.
A case in point is our partnership with Deutsch Bahn, the largest transport company in Central Europe, which manages a large, heterogenous vehicle fleet and the necessary infrastructure. The company has identified additive manufacturing as increasingly important in the procurement of discontinued or difficult to source components. However, it poses a challenge to the strictly regulated rail sector, where high quality standards are imposed on suppliers and the products they manufacture.
To solve this challenge, TÜV SÜD and Deutsch Bahn pooled our expertise and developed a certification scheme for the suppliers of spare parts and finished components produced by additive manufacturing. The scheme ensures consistent and reproducible product quality throughout the process chain. Two companies, Siemens Mobility and MBFZ toolcraft, have already been certified according to this new guideline.
Our experience working with Deutsch Bahn has validated a key principle: The use of quality infrastructure tools such as accreditation and certification will continue to play a key role in ensuring that product quality is not compromised when applying new technologies in the supply chain.
IoT innovations have the ability to revolutionise the supply chain. Business sectors as diverse as construction, logistics and medicine are keen to unleash the power of automated vehicles (AVs), automatic guided vehicles (AGVs), collaborative robots (also known as cobots) and drones. Enabling these machines to interact autonomously in an integrated ecosystem could mean fleets of robot builders can complete dangerous building projects in days; make faster, more efficient deliveries; or diagnose and treat the elderly and infirm in remote areas.
From a safety perspective, integration of autonomous technologies into the supply chain could also bring about a multitude of complexities which need to be rigorously tested. Using traditional test methods will not suffice when implementing advances of this nature. Instead, newly developed simulation-based testing could provide a more effective solution.
To put this in perspective, one of the greatest challenges in the homologation of autonomous vehicles is the use of technical means to ensure automated driving functions are executed accurately, reliably and safely.
TÜV SÜD experts estimate that each fully-automated driving function would need to be tested in about 100 million possible driving situations. Given this, scalable verification and test methods are needed to cope with an enormous number of scenarios. Scenario simulations are necessary to make these goals attainable. TÜV SÜD, chipmaker NVIDIA, and automotive consulting firm AVL are working together to validate and establish the use of simulations as an approval tool. The main task of TÜV SÜD is to ensure the trustworthiness of the simulation tools so that test results can be used for approvals.
The acceptance of scenario simulation as a testing method is instrumental in ensuring that quality infrastructure will be able to handle the complexity posed by new technologies in the supply chain.
Entering the Brave New World of Supply Chain 4.0 is an exciting prospect, but without the right guidance, it can seem impossibly daunting, even for adventurous-minded companies.
That is why the age-old principles of seeking out accreditation and certification – proven infrastructure which has served humankind so well through four centuries of industrial evolution – must underpin efforts to turn Supply Chain 4.0 dreams into a fully functional reality.
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