COVID-19 Accelerates Digital Transformation in Quoting and Purchasing

By Hailey McKeefry, Supply Chain Journalist

Digital transformation has been coming for a while. The supply chain is more digital than ever before…and component purchasing is being enhanced as well. The silver lining in the COVID-19 cloud that is plaguing the electronics industry, and the whole world, is that it may accelerate that transformation.

At least, that’s what we heard on The EMS (Eric Miscoll Show) from two industry veterans: Chintan Sutaria, President, CalcuQuote and Don Akery, President, TTI Americas. TTI, a broad-line distributor of passive, interconnect, electromechanical and discrete components, opened its doors almost 50 years ago, and now has 13 distribution centers globally. CalcuQuote, meanwhile, is focused on simplifying and optimizing the procurement process by delivering EMS providers an end-to-end RFQ management system, a supply chain management system and other solution-based software.

Global organizations are grappling with how to maintain and build their businesses while addressing shifting requirements in regard to COVID-19 as it moved from China to Europe and then to the United States. While organizations that support manufacturing, including both component distributors and the software that supports their supply chain activities, have been deemed essential, office workers have been sent home to work, and distributors have been working to keep those in the distribution centers safe.

“Initially, our employees were afraid, but we’ve put in precautions to protect them including local distancing and contact tracing,” said Don Akery, adding, “Our employee attendance has been higher than ever during the spring break than it would have been without the pandemic. It’s a testament to the loyalty of our people.”

Although supply chain visibility and digital transformation are terms that have been thrown around for years, this newly emerged business environment has simultaneously underlined the necessity for true supply chain digitization that allows for the next level of visibility to address unexpected turns. It also highlights the technology adoption gaps in today’s electronics supply chain.

“Digital transformation is now an urgent and persistent requirement in the supply chain for many organizations,” said Don Akery, adding that his company, for example, has begun using Microsoft Teams to create the necessary connections. “This pandemic has made everything harder, from setting up sales calls to transporting people and goods to connecting with existing customers has gotten more complicated. It also pushed us to technology adoption faster.”

“Being able to quickly and efficiently access and assess information creates a path to making better decisions, which in turn translates to agility and resilience” said Chintan Sutaria, adding, “Providing the next level of effective communication, digital supply chain capabilities enable organizations of all sizes to exchange supply chain information at scale and faster than ever before. This pandemic has illustrated on a massive scale how our mindset of the way we work together needs to change and be more future-focused.”

TTI has found that digital transformation has allowed the company to connect with customers more often, more easily and with better results.

“Our organization is very active on any number of social media channels, and during these times, they’ve allowed us to connect even more, It has become incredibly important,” Don Akery said.

Further, the sudden onset and ongoing nature of the reality created by COVID-19, has many organizations reconsidering their skepticism of cloud-based software systems.

“In the past, our customers were afraid that they would lose control of their data if it were stored in the cloud, but now the upsides are clear: no software to install, and the inherent ability to work remotely, using their accustomed software, without disruption.”

These months have also proved that digital transformation is required as customers start to question the potential downside of lean supply chain practices and debate Just-in-Time versus Just-in-Case inventory. High levels of supply chain visibility are a crucial step to delivering the inventory timeliness that customers demand alongside the much-revered agility and resilience.

“A new decision model has emerged in the supply chain for EMS customers,” said Chintan Sutaria. “Today, the number one element that buyers put into our software is on-hand inventory. Further, organizations are learning that many of the quoting and purchasing challenges are best addressed holistically at a systemic level, rather than at the individual transaction level.”

The real question has become how organizations will take what they’ve learned about digital transformation and translate it into day-to-day business practices as organizations move to whatever the new normal will be.

“Our new ways of doing business and the new tools we’ve adopted have started to feel very natural, so I think it’s going to stick,” said Don Akery. “We have realized that these new ways of doing things digitally are efficient and cost effective and let us communicate what we are doing and let us respond to keep the supply chain going.”

At its best, automation frees up workers to spend more attention on elements of the business improved by human expertise and relationships.

“There will be this distinction between transaction processing versus expert decision-making,” said Don Akery.

You can see the full video of the show here: