The supply chain as part of systems engineering
The coronavirus pandemic has highlighted many inefficiencies in supply chains. The shortage of toilet paper in spring 2020 is one example of this, but it can also be attributed to irrational consumer behavior in some cases. The current shortage of semiconductors is more interesting for systems engineering.
As ISO 15288 states that the supply chain is part of systems engineering, this is a relevant and topical issue for us.
Supply chain in ISO 15288
Two of the "Systems Lifecycle Processes" of the ISO 15288 deal explicitly with supply chains (I refer to ISO 15288:2015). These are:
- Acquisition Process (Claus 6.1.1) - these are the processes of the consumer who utilizes products and services from suppliers.
- Supply Process (Clause 6.1.2) - these are the processes of the supplier who provides products and services to a user.
Both roles, supplier and user, can of course also belong to the same organization, which usually simplifies the processes. Especially with complex products, it is normal for companies to act as both supplier and user.
Risks
There is enormous cost pressure in the automotive industry in particular. The resulting structures give rise to several risks. One well-known example is Just-in-time deliveryIn order to minimize warehousing, components are delivered at very short notice and in small quantities. OEMs have mastered this and just-in-time does not currently cause any major problems.
More problematic is the small number of suppliers for certain components. If, for example, only a single supplier produces a certain control unit, this can have catastrophic consequences for the OEM in the event of a production failure.
The supply chain risks are: (1) Small number of suppliers for a particular component; (2) Large number of suppliers; (3) Deeply nested supply chains.
Another risk is a large number of suppliers for the product. Combined with the previous point, this significantly increases the risk for the OEM: the more suppliers, the higher the risk that one of them will fail. If there is no alternative supplier for the affected component, this can paralyze the OEM's production.
Deeply nested supply chains are also problematic. If a supplier is also dependent on a large number of direct or indirect suppliers, the risk of failure increases even further. Worse: If our OEM has several suppliers for a component, this seems to mitigate the risk. However, if these suppliers use the same sub-suppliers, then both suppliers are affected if the sub-supplier fails.
What to do?
In principle, ISO 15288 also addresses potential risks in the supply chain. However, the standard (for good reason) only describes what should be done, not how. Nevertheless, it is worth reading the standard again right now in light of the current situation and adapting existing processes.
A regular risk analysis is particularly important - this should actually be a matter of course. However, due to the increasing complexity of products, it is more important than ever not to stop at the supplier, but also to include the other links in the supply chain.
Other measures are of a more strategic nature and therefore cannot be implemented "on the fly". This includes, for example, the important decision of what is done "in-house" and what is not. Some problems can also be caused by an outdated architecture. But adapting the architecture is a huge undertaking. This is one of the reasons why many OEMs have decided to Architectures from Tesla very carefully.
