Hon Hai Precision Industry, one of the world's largest EMS factories, has plans for its subsidiary, Foxconn, to undergo a comprehensive digital transformation. The goal is to ensure data analytics across all existing fields, especially within business processes, to further reduce labor costs and manage departments more efficiently and in real time. However, large conglomerates often face significant communication costs and cross-departmental challenges. Traditionally, the approach has been to launch major projects and, if further issues arise, to initiate additional large projects, resulting in a sluggish pace of digital transformation.
Considering the varying benefits achieved in different scenarios, Synergies Inc. believes that the most worthwhile entry point for digital transformation is to focus on the business value chain. This is because it is closely related to industry pain points and overall company strategy. For instance, the retail industry typically focuses on marketing and distribution, while manufacturing is often centered on the supply chain. Therefore, for Foxconn's digital transformation, our choice was to first introduce JarviX in the inventory and procurement scenes.
Under the guidance of Synergies Inc., by integrating the JarviX platform, Foxconn targets operational scenarios such as management, physical control, warehouse management, production lines, IE, and engineering, as well as digital transformation in intelligent production scheduling. Originally estimated to take five years, this process is now projected to take just three after evaluation.
JarviX Platform Powering Supply Chain Digital Transformation
The supply chain currently faces three primary challenges centered on the issue of "material shortages":
Shortages affecting operational rates: Unlike FMCGs, if the procurement cycle is lengthy, production can be delayed in the event of a shortage.
Supply chain disruptions: Aggravated by the pandemic, leading to significant material shortages.
Uncontrollable costs: Traditional inventory management practices, which rely on production orders and inventory levels, can lead to rising inventory costs due to fluctuating demands and economic conditions.
Thus, to successfully digitize the supply chain, solutions must address three key questions: When and how much to purchase? How to buy the most cost-effectively? And, have the materials arrived?
Detailed implementation requires data input, including analyzing internal company data (historical orders, inventory inflows, and outflows, procurement, and supplier data). Incorporate factors such as demand variability, delivery dates, production cycles, and customer service levels to dynamically optimize inventory strategies.
JarviX Platform Overview and Applications:
Unfulfilled Material Purchase Order Monitoring and Alerts: JarviX boasts a robust monitoring and alert system that can detect unfulfilled material purchase orders in real-time. Upon identification, the system immediately sends alerts, ensuring the procurement team follows up promptly and reducing the risk of production halts due to material shortages.
FSN Inventory Analysis: Using the FSN (Fast/Slow/No Moving) analysis method, JarviX categorizes inventory materials into three classifications. This allows companies to manage and plan inventory effectively based on the movement speed of each item.
Benefits of Segmentation Analysis: This categorizes products with longer cycles, like those purchased every few months with a certain shelf life. By continually monitoring inventory, companies can preemptively identify stagnant materials that might surface during year-end inventory checks and take action accordingly.
Smart Procurement Suggestion Simulator: JarviX's simulator is a potent tool aimed at offering procurement teams intelligent recommendations based on machine learning algorithms. It not only transforms intricate data analyses into comprehensible suggestions but also provides a user-friendly interface that even non-tech personnel can easily navigate.
Outcomes and Benefits:
With the integration of the JarviX platform, supply chain analysis efficiency skyrocketed to 78%. Even more notably, inventory costs witnessed a significant drop of 8-15%, bringing substantial economic benefits to the company.