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Feasibility studies play a crucial role in the automotive industry during the procurement process for parts under development. After all, even before these new parts are developed and contracted, companies need to ensure that they can be delivered in the required quality and quantity, on time and at appropriate conditions. SupplyOn Technical Review has been efficiently handling all of this for years. In most cases, the customer provides the specifications. But it can lead to even greater efficiency and project success if the suppliers can also initiate changes themselves.The classic Technical Review processTechnical verification is the process of verifying the quality, quantity, delivery dates, and conditions of a new part. For this purpose, the customer company requests information from the suppliers by means of a questionnaire. The customer then assesses the supplier's feasibility and maturity.Read more about Technical Review in this blog post.Change management: a new process for Technical ReviewAutomotive supplier ZF Friedrichshafen has been one of the main users of the Technical Review process since its inception. And because Technical Review has worked so well from the start, they wanted to see if Technical Review could be extended beyond the standard process.ZF project manager Alejandra Rangel Granados explains: "We often have a situation where a supplier needs to independently coordinate and approve necessary or desired changes to the product and process with us as the customer before the change is implemented. In this way, the supplier can be sure that ZF, as the customer, agrees to the change. "And it was no coincidence that SupplyOn already had a concept up its sleeve. There were already concepts on how Technical Reviews could also be initiated by the supplier. With a small expansion of the Technical Review, the time had come at the beginning of 2023: the improved process based on Technical Review was ready for ZF.How the supplier-driven Technical Review process for change requests worksAs a prerequisite for the supplier-driven process, the customer first creates a template. This template defines the type of changes, such as product information, that the supplier can send to the customer.The supplier can then use this template to send structured change requests and start the coordination process with the customer. After receiving the request, the customer may need to coordinate further details with the supplier and check the feasibility of the change. The result is immediately displayed to the supplier in Technical Review and sent as an email notification.Advantages of the optimized processZF project manager Alejandra Rangel Granados: "The ZF Commercial Vehicle Solutions division has been using the new process with its suppliers since mid-January 2023. Previously, change requests for parts and processes were made via unstructured e-mail communication, which was difficult to track. Thanks to SupplyOn, we can now offer a fully electronic, easily traceable and data-secure process. In addition, we are now much better informed before the supplier makes any changes."Suppliers also benefit from the new process. They now receive timely feedback on important change requests. Emails from the supplier are no longer lost because the change is stored transparently and securely at SupplyOn.Meanwhile, SupplyOn is already making plans for the next expansion stages of Technical Review. Product Manager Martin Weber comments: "We are sure that we will be able to implement further use cases based on Technical Review quickly and easily." So, it remains to be seen what the future holds for the all-rounder Technical Review — in any case, the end of the line does not seem to have been reached yet.
A digital twin is defined as the digital image of a product or process. It supports process optimization, early error detection, and automation gains along the entire value chain. New, service-oriented business models can be created based on the digital twin. However, the German economy is still having a hard time with digitization and an even harder time with digital twins."A large proportion of companies are using digital technologies to secure their competitiveness, but not to develop new business models, for example in the form of digital, portfolio-complementing value-added services," says Michael Finkler, VDMA Board Member for Software and Digitalization, in a recent article for Industry of Things (article in German).Digital twin — already a realityAdmittedly, digital twins are not yet at the forefront of many conversations and processes at customers and suppliers to create new value-added products and services. Nevertheless, SupplyOn has been working on this in the background for some time. For each material number, for example, all available data — even at serial number level — is combined and made available. This makes it possible, for example, to automate goods receipt or to provide quality data electronically. SupplyOn supports various initiatives in this regard, such as Industry 4.0, Asset Administration Shell (AAS) or Catena-X standardization.Hence, the foundation is laid for companies to develop their own value-added services or secure competitive advantages based on a digital twin. Now it's time to get active and creative!
In recent years, an increasing number of countries have introduced so-called invoice clearance procedures. Before electronic invoices can be sent to the recipient, they must be checked and approved by a central government agency. The primary concern is the correct reporting of tax data. These clearance models are usually referred to as Continuous Transaction Controls (CTCs) because the verification takes place in near real-time. CTCs aim to reduce the VAT gap. Governments use this term to describe the loss of tax revenue due to missing or incorrectly reported tax data.The first countries to implement such models are in Latin America. They are already discussing extensions such as the reporting of incoming payments or certain tax benefits. The EU is also considering CTC. Just at the end of last year, an important package of measures entitled "VAT in the Digital Age", or VIDA for short, was adopted. This creates a framework for how tax reporting for companies in the EU should look in the future.Companies in France will have to be "clearance-ready" by 2024In France, a CTC model for B2G (business to government) transactions has been in place for several years. Invoices to public institutions must be sent to a central government portal called "Chorus Pro". In July 2024, this procedure will be gradually extended to B2B (business to business) transactions.From July 2024, all companies with a French tax number must be able to receive domestic invoices via the new clearing procedure. Large corporations must also be able to send invoices using the new procedure from July next year. Medium-sized businesses will be required to do so from 2025 and smaller companies from 2026.In addition to the e-invoicing obligation, there is also an e-reporting obligation. This applies primarily to cross-border invoicing and relates to invoices that are not already covered by the national clearance procedure, for example, invoices from other European countries. Their tax data must also be reported to the French tax authorities.What does the French clearance model look like?Before the introduction, France evaluated and compared different CTC models from other countries. It chose a decentralized approach that gives maximum flexibility to market players. The invoice sender or recipient has two options here: Either they send the invoices directly to the central government portal PPF (Portail Public de Facturation, an evolution of the "Chorus Pro" portal already used for B2G). Or they work with certified providers called PDP (Plateforme de Dématérialisation Partenaire). The PDP receive the invoices, report the tax data to the central PPF platform and forward the invoice to the recipient.Each French company is free to choose whether to work with a PDP or to connect directly to the central PPF platform. In addition to the PDP, there will be another type of provider, the so-called OD (Opérateur de Dématérialisation). Only PDP are allowed to send invoices directly from a supplier to a customer and report tax data to the central PPF platform.However, ODs can also provide additional value-added services, such as matching an invoice against specific "requirement data" such as the purchase order or advance shipping notice. This can ensure that only invoices that have undergone successful upstream validation enter the clearance process. Lengthy and cumbersome cancellation processes can thus be avoided.In addition to transmitting invoice data and tax messages, suppliers in France must support a standardized status model. The so-called "lifecycle status" of an invoice can go through several phases. The following statuses are mandatory and must be supported by all parties: "Submitted", "Refused ", "Rejected" and "Payment Received".Decentralized clearance model in France:How does SupplyOn support the new French clearance model?SupplyOn Invoicing already covers the French invoicing requirements. SupplyOn also offers a solution for the new French clearing procedure. The development team is already working on an extension for Invoicing to support the new French CTC procedure from July 2024. This solution extension will be available in time for SupplyOn customers to prepare. During solution design, SupplyOn works closely with government agencies and consulting firms to ensure that all requirements are directly incorporated into the product.SupplyOn Invoicing enables suppliers to check invoices against various quality criteria before sending them. This can be a check against a purchase order (PO) or against customer-specific specifications. In this way, suppliers can be sure that their invoices will be accepted by the customer and paid promptly. Time-consuming correction processes are eliminated. In case of discrepancies, suppliers can work directly with their customers to find a solution.For customers, SupplyOn Invoicing is an upstream quality gate that checks invoices in advance and ensures a consistently high level of quality. This leads to an almost completely automated invoice receipt process.The planned solution expansion for France thus ensures that SupplyOn customers continue to enjoy all the benefits of Invoicing and can use the service as usual.
How do you achieve a resilient supply chain with transparency, visibility, and sustainability in 2023? Focus on these four areas:CollaborationActual two-way collaboration is necessary to achieve supply chain resiliency. Instead of chasing down parts, real-time updates and feedback all in one place are needed to make the best decisions. In order to achieve this, accurate data and the right tools are imperative for this process to create a holistic environment for both your organization and supply chain for ultimate success together. DataTo create more effective and efficient supply chain management we need data. Everyone wants data and has it in some form. Unfortunately, what is referred to as a "data lake" is often more like a bunch of random muddy puddles in a field after a huge rainstorm; not clear, not connected, unknown depths, and is generally very messy. So how do you collect it and connect it to analyze it efficiently? With digital tools.ToolsFor accurate data, visibility, resiliency, and sustainability, ultimately, you need the right tools. Organizations everywhere realize and understand that more tools are required to level up a system, replace a system, or bridge the gaps with existing systems. With the right tools, data can be collected and organized in an easy-to-use platform with dashboards and reports at your fingertips to continually monitor, collaborate and analyze your data. True PartnershipManufacturers everywhere have a lot at stake. However, going away is the "do it or else" attitude regarding supply chain. Instead, it is being replaced with holistic, collaborative, and honest relationships with key suppliers and competitors. In 2022, I heard more and more, "how can we work together to get this done?" Wordsmithing mashups with competitor + partnership + friendship are coming into play like 'friendtitor,' 'partnitor,' and 'competiship.' Right now I am loving this more open-minded approach to chaining business processes and practices. I'm excited to be a part of this ecosystem and change for the future.
It's always important to take a look back before moving forward. Doing this keeps us from that brain fog thing of wondering why we walked into the kitchen for the third time in a row and still forget to turn off the oven. In 2022 there was a lot, and even though 2020 and 2021 seemed like they morphed together to make one extra-long, exceptionally insane, and challenging year, 2022 felt like an extension of that in many ways. I'd liken it to a roller-coaster (and I mean the kind of broken down, roller-coaster at an abandoned amusement park with monsters chasing it, ala Scooby Doo) with the non-stop events, war, more covid and health issues, insane weather, strikes, raw material shortages, price jumps and still fearful of those murder hornets. Before Covid, when a random person would ask what I did for a living, and I said supply chain software for automotive, aerospace, and complex manufacturing, I'd immediately see their eyes glaze over and then dart around looking for a quick exit. Supply chain sounded boring or too complex, and even more, the software for it. "Kind of a specialty," I'd remark and smile to myself, as the average person had no idea just what pressure went into the day of a buyer or supplier in supply chain. Supply chains take center stageThen Covid hit, and supply chain was now a household term. Suddenly, I felt like I was in that 1979 EF Hutton TV commercial, except for the supply chain. People actually wanted to listen about supply chain software. In fact, I'd find myself engaged in long conversations about supply chain matters and essentially saving the world. Even my kids were talking about it. Especially when I'd come home from grocery shopping and I'd turn up with their favorite food or snack requests missing from the grocery store run. Topics would range from worker shortages, safety, illness, raw materials, strikes, printed packaging, inks, crops, and transportation, to name a few. I'd explain what I already knew and then try to figure out what exactly was going on.As a dabbler in creative writing, I couldn't even make some of this stuff up. It was sometimes perplexing why some things just went missing for months and not others. But we muddled through like everyone else; people and companies got creative and resourceful. It was impressive to watch it unfold. By the end of 2022, even with all the chaos, things started to feel normal-ish again, and the world opened up further. Companies needed solutions, and my calendar was booked up for introductions and demos. Supply chain was up front and center now. By fall, I was also able to attend quite a few sold-out industry conferences as well. Speakers, experts, and attendees clamored; we had all been cooped up for way too long and needed desperately to connect the way we used to. We had a thirst for more knowledge about the state of supply chains and thoughts on the future. The vibes were much more different; it was high energy, focused, with a scent of desperation for real change. From meetings with prospective customers, customers, and industry conferences, what was once a mere "pie in the sky" wish of real supply chain collaboration was now, even more, a much-needed reality. We needed to propel supply chain management into the future, not just to be efficient and manageable but to sustain the lives of companies.2022 needs recapResiliency"Resiliency" is a term that has been tossed around before the pandemic, but in 2022 I found it to be the theme of the year when it comes to supply chain. However, resiliency doesn't necessarily mean the same thing for everyone. The list goes on: strong supply chain, access to inventory, reduced costs, backup suppliers, and insight into trends, issues, and challenges. So, what does it mean to have a "resilient supply chain" to you? TransparencyEven before the global pandemic, supply chains were volatile. In the complex manufacturing world, buyers/planners would forecast and put their orders into suppliers around the globe, and suppliers would accept them. For automotive and aerospace, that could be a year-plus lead time or even longer. Until the promise date arrives and there are no parts, or perhaps if an advance ship notification (ASN) is generated, there is literally no status on the supplies that are ordered. When a part is missing or late, chaos ensues, right? Things like production shutdown can occur, late orders, and essentially, ultimately, affect the bottom line. VisibilityOne of the biggest things I heard over and over again at conferences and from prospects was having greater "visibility" into their supply chains all the way to tier N. The statement, "we don't know who our suppliers are, " became a constant concern. Of course, the goal is to plan better, and especially OEMs and top-tier suppliers want the ability to know things even before their suppliers do in order to plan better and make informed proactive decisions. SustainabilityI remember when sustainability was the buzzword back in the 90s. I worked on quite a few sustainability statements for customers. Everyone seemed to have a goal about sustainability by the year 2020. That came and went, and the global pandemic made us go backward on this initiative, more disposable everything, personal protective eqipment (PPE), shortages, expedited orders, and transit. After all this, we are trying to get back on course to reduce our carbon footprint while being profitable. Stay tuned for more tips, tricks, ideas, and ramblings.
On January 1, 2023, the so-called Act on Corporate Due Diligence Obligations in Supply Chains — known in common language as the Supply Chain Act — will come into force in Germany. Oliver, you have been dealing with this topic for quite some time. What is your impression? Are the companies that are affected by it well prepared for it?Initially, the law only affects large companies with more than 3,000 employees in Germany. My impression is that many of these companies are dealing with the issue but have not yet taken all the precautions to be able to fulfill the required due diligence.Just one year later, on January 1, 2024, even smaller companies with 1,000 or more employees will be affected. Even if this deadline still seems a long way off, there will be an urgent need for action from mid-2023 at the latest.What needs to be done in concrete terms?The law obliges companies to exercise due diligence with regard to the protection of human rights and the environment — and in particular with regard to their supply chains. This includes, for example, the protection of children, fair working conditions, environmental protection measures to ensure the health of workers — to name the most important aspects.To begin with, this means that companies must take a very close look at their supply chain and ensure maximum transparency: How, where and under what conditions do my suppliers produce? At which of my suppliers' production sites is there a risk of human rights being disregarded? And so on. Then they must work with critical suppliers to minimize their risk potential.Creating transparency in the supply chainThat sounds like a lot of work, which certainly creates major challenges for companies.That's true — but the good news is: there are established tools that can be used to digitize and automate these processes. If we take SupplyOn's solutions, they all essentially aim to create maximum transparency in the supply chain. This starts with master data, which can be easily maintained and updated via SupplyOn and is centrally available to the entire organization. It continues with action plans, which can be created and processed online, and extends to comprehensive risk management, which can be implemented via SupplyOn by incorporating external and internal data sources.Tools are one aspect — but how does a company integrate its suppliers into this process without having to invest an extremely large amount of time and effort?SupplyOn offers the advantage of an enormously large active supplier network, consisting of over 140,000 companies worldwide. Numerous data are already available here in the highest quality. Suppliers only need to update their data in one place. In the end, everyone involved benefits from this.The four-step approachWhat would be a pragmatic approach, in other words, what would you specifically recommend to a company — and how can SupplyOn support it?I recommend approaching the subject in digestible "bites" step by step, as follows:Step 1Create transparency in the existing supplier base: The SupplyOn Business Directory in combination with the Flexible Survey offers the possibility to make an inquiry among the suppliers. Corresponding questionnaires are already available in the system and can be used easily. The results flow automatically into the Business Directory. This sets the foundation on which to begin.Step 2Adding other aspects related to the Supply Chain Act to contracts: SupplyOn Contract Management offers contract templates that include these aspects and supports the update process for new and existing contracts.Step 3Creation of a catalog of measures to optimally support suppliers on their way to compliance regarding the Supply Chain Act: Using SupplyOn Action Management, remedial and preventive measures can be defined in coordination with the supplier and then processed in a structured and transparent manner for both parties. This ensures that agreed measures are actually anchored in the organization and that new processes are put into practice.Step 4Expand risk management and existing reporting processes to include Supply Chain Act aspects: SupplyOn offers the option of enriching an already established internal risk management system with external data in such a way that this creates an even more precise picture of the actual risk. In times of great uncertainty, this step is essential and should be the desired goal for all companies.And one final advice?Don't hesitate any longer, just start and work your way forward step by step.
As explained in my last blog article "Four steps to achieve 100% compliance in purchasing", purchasing organizations that take the topic of compliance seriously should first create a solid basis with the introduction of standardized processes and tools in order to achieve company-wide transparency and consistency in their purchasing activities. This allows mandatory topics such as avoiding bribery or maverick buying to be brought under control.Today’s world is more complexBut compliance today encompasses much more than the purely mandatory topics and has become significantly more extensive, complex and dynamic. Purchasing is ideally positioned for these new requirements thanks to its central role in the company.Examples of the new requirements are:More comprehensive risk management in the supply chainHigher requirements for IT security and data protectionNew legal requirements, which can vary greatly from country to country For example, the Supply Chain Due Diligence Act or Conflict Minerals Reporting based on the Dodd-Frank ActSanctionsFor example, in the case of violations of the human rights of UyghursConstantly increasing requirements from customers or from our own product marketingFor example, the reduction of the CO2 footprintThe good news is: to address these new challenges, you can build on solutions that are already in place. The core processes of purchasing, which are already digitized today, can be relatively easily supplemented with further needs from compliance and risk management.In this context, it is not only important that all relevant departments internally, i.e., quality assurance, logistics, product development, data and security management, compliance management, etc., are involved in the processes, but also that the results of these processes are available for strategic purchasing decisions. For this to succeed, purchasing must become active at an early stage and needs access to these other areas.Key player: the Sourcing Decision SheetAs in my last blog article, I would like to explain the practical implementation using our customer Continental Automotive as an example. Just as for the Rfx process, uniform processes and software tools were defined for the various compliance topics and made available via the SupplyOn solutions. The aim here is also to involve suppliers at an early stage and to provide them with central access via SupplyOn to maintain the necessary information.At Continental Automotive, the so-called Sourcing Decision Sheet, which forms the basis for decision-making by the Purchasing Council at Continental and which used to be based primarily on price and conditions, has been and will continue to be successively supplemented with information from the various compliance aspects. As a result, these are also automatically taken into account in the supplier selection. The decisions made by the strategic purchasing committee are in turn recorded and documented centrally in the tool.Here are some examples of data that automatically flows into Continental Automotive's Sourcing Decision Sheet from non-purchasing areas:Risk Management: Suppliers of production material must include in their bids all locations that will be relevant for the production of the requested parts. Based on their geo-location, all specified locations are automatically classified and assigned to the risk categories specified by Continental.Supplier Assessment: Performance data is already available for suppliers with whom Continental Automotive has been working for some time — both at site and commodity level.Feasibility Study: For new parts to be developed, feasibility analyses with regard to technology, quality and logistics are carried out in parallel with the sourcing process with the suppliers in question. This process is supported by the SupplyOn Technical Review service.Certificates: All suppliers are required to enter their status for standard industry certificates in the SupplyOn Business Directory. Depending on the certificate type, availability is sometimes even a mandatory prerequisite for being awarded a contract.Compliance: Adherence to guidelines and regulations can be flexibly queried from the supplier or alternatively integrated from external data sources or customer systems. All these different aspects flow into the Sourcing Decision Sheet and generate a holistic picture based on formulas and weightings that can be defined freely. Purchasing thus has a flexible and scalable tool at its disposal for effortlessly mastering all aspects relevant to procurement. This means that purchasing is well equipped not only for current challenges, but also for those of the future.Action recommendations at a glanceIn summary, here are the steps that should be followed in order to cover all aspects and achieve 100% compliance in purchasing:The dutyFirst of all, it is necessary to introduce uniform and company-wide binding core processes that are anchored in the organization via suitable tools. In this context, increasing master data quality is a very important aspect. High data quality is a prerequisite for any kind of digitization and thus a homework assignment for all organizations involved. The good news is that digitization not only requires high master data quality, but also supports and enables it.The extra mile for even higher performanceThe extra mile consists of supplementing the core aspects in the award process — i.e., price and conditions — with all aspects of a 360-degree compliance management process and integrating these into the strategic decision-making process.