Let’s briefly describe the “what” of a digital supply chain before evaluating the “why.” What is a Digital Supply Chain? A digital supply chain automatically performs the traditional functions of procurement. It behaves like an experienced buyer, but is infinitely scalable, immediate and of unparalleled accuracy. All turnkey at Sonic, whether quick-turn or scheduled, is run-through and managed-by the digital supply chain. It procures on average 1,000 unique part numbers and 1,000,000 pieces per week arriving at the factory on an average delivery of 6 days ARO. About 75% of sourcing and order placement is fully automated, never touching purchasing. What can you expect it to do for you?
Digital Supply Chains are Fast: Once your engineering data has been reviewed and uploaded, and the sales order entered, 75% of parts within lead time will be ordered that same day. The remaining parts go to purchasing, who with 25% of the former work, now has the time to source the more difficult components. Digital enables purchasing to utilize their expert problem-solving skills and complete the kit for your next build.
Digital Supply Chains are Accurate: With over 1,000,000 rows of data entering the building every day, our supply chain is updated, well… by the supply chain. This, in addition to a suite of business rules, keeps the data continuously refreshed and highly accurate. We know when to order, how much to order, from whom, at what price and when to be delivered. While others view data cleansing as ‘not sexy’ we see it as foundational to our mission of your success. A supply chain managed as data “buys it right.”
Digital Supply Chains are Functional: While there are incomprehensible black box solutions out there, a supply chain must stay focused on its core value-added activities: quoting, sourcing, procurement, confirmations, order management, rescheduling, tracking, invoices, and remittances. These are the processes that deliver on-time parts to on-time kits to a factory that can then deliver on-time to you, the customer. No capacity limits, no resource conflicts, no alternate priorities. The job gets done.
Digital Supply Chains are Experiential: Our Digital Supply Chain is coded by operations engineers working within purchasing as buyers. Engineers code to their hands-on expertise, not like the back-and-forth of remote engineers coding to iterative specifications. Because of this, our processes behave as you would intuitively expect your own process to behave, disciplined but with built-in flexibility. Across the supply chains of our 100 OEM customers, we fit.
Digital Supply Chains are Strategic: The executive team can speak to digital processes because they optimize the business, not the silo. Digital provides a stable cost basis for Sonic as a business, while maximizing customer service. We move fast to respond to your needs as a course of business; with schedule changes inside of lead time being the norm for many of our customers.
Digital Supply Chains are Enabling: Digital creates an environment where buyers know they are valued. The ‘busy work’ is handled by automation leaving time for the experts to problem-solve. A digital solution without human problem solvers is kind of pointless, as manufactured assemblies cannot be built and shipped until the last part arrives; and digital will perform shy of 100%. Our team enjoys the challenge and engagement of managing digital exceptions. The buyers have many years of experience at Sonic and extremely low turnover. We also partner our individual buyers to specific suppliers to create the one-on-one relationships that foster long-term cooperation and mutual problem solving. We recognize the necessity of “kit complete” to your delivery requirements and have capacity to work it.
Digital Supply Chains Inspire Trust Relationships: Whether plugging into Suppliers, Digital Service Providers or other departments at Sonic, the digital supply chain opens constant dialog between real people. What needs to be fixed? What could we accomplish with additional data or a process changes? How about proposing a new transaction set? Can we achieve lower prices, better freight options, inventory programs or financial terms considering the lower costs and higher revenues of being plugged into each other? Working together, we can pick up the phone and ask a favor from time to time, since we know each other well and have a solid history of trust between us. Sonic works on your behalf to maintain a “supply chain” (continuity of supply) rather than an arms-length transactional spot-market. Recurrence of ordering & fulfillment is in the mutual interest of all parties.
Digital Supply Chains are Responsive: What do we mean by responsive? Within 30 minutes of loading new demand, we can have 75% of the materials ordered and scheduled for on-time delivery. While working to best-effort and customer urgency, we regularly accept new business inside 30 days. Many quick-turn builds are ordered and completed in 1-5 business days. Scheduled ‘forecast’ customers with a complex mix of assemblies have their revised long-term dates and quantities dialed in over the course of a week; supplier terms permitting. Exception management is the norm of our model, not an interruption to business. We do our best to sync our business to yours.
Digital Supply Chains are Adaptive: Always having a pulse on the market data, our systems switch between lead time orders and stock orders; full packages and broken packages, buying for a single build or the entire schedule horizon. We minimize shortage risk while also minimizing excess risk on inventory and open orders. When COVID hit, the digital supply chain shopped the globe 24/7, buying inventories before anyone else could. In an allocated market, Sonic grew. While others purchased a random mix of spot available parts and went into financial distress, Sonic bought ahead to backlog and used up all surplus inventory within a year post-COVID. We take the financial management of your product seriously.
Sonic was founded by manufacturing professionals and engineers that didn’t particularly like the existing EMS model. Where others would quote full bill of material lead time for new production (12-52 weeks), Sonic would book new business on “when do you need it?” (4-12 weeks typical). Where others would charge administrative fees for rescheduling or engineering change processing, Sonic would acknowledge “change” as a normal course of business. Where others would take weeks to get materials on order; Sonic would perform in minutes on most; and have the exceptions identified in a few days. Where others managed supply chain as physicality (inventory) and dollars (finance), Sonic would manage the supply chain as data. Continuously moving data around the globe and only converting it to parts & dollars as-needed. This is by far the most responsive and lowest total cost of ownership (TCO) supply chain model.
After working a decade on automated data accuracy, Sonic manufacturing Technologies launched its digital supply chain in 2016. Over one million parts were procured with the first supplier in the first year; with peak performance of 91 million parts across the supply chain in 2021. In those COVID years, the digital supply chain shopped the globe 24/7, grew the business, fulfilled customer demand, and navigated an allocated market without requiring additional resources in purchasing or inflicting headcount reductions on manufacturing due to allocations & shortages.
Curious about how our digital supply chain actually performs? Give us a test drive.
