In this latest Coffee Talk, TraceGains Product Manager Cory Lininger explains networked product development.
TraceGains: What’s a challenge contract manufacturers and brand owners share that technology can fix?
Cory Lininger: As you know, every type of company faces unique challenges. A critical shared challenge is who owns a relationship and who bears responsibility for that relationship. This then breaks down into multiple challenges, such as:
- Who owns the sourcing of raw materials that go into the finished good?
- Who’s responsible for obtaining all the documentation?
- Who qualifies the vendor or the ingredient?
It comes down to tracking the different types of relationships of all the various components for a given supply chain. It becomes complicated quickly. And what we’re hearing all the time is that no one has solved this challenge from an assistive-technology perspective.
Today, most of this rests with institutional knowledge, emails, and phone calls. And because there isn’t a systemic solution, many times, the relationship between the brand and contract manufacturer changes repeatedly. Meaning that often a brand will redevelop an existing relationship with a contract manufacturer when they want to work on a new product.
For example, the brand might need to re-evaluate the components that go into that product to make sure the contract manufacturer is qualified to accept them. Again, technology can help solve that by tracking those relationships and the ownership of compliance.
Another associated challenge for brands and contract manufacturers is keeping track of where raw materials are approved for use:
- Which finished goods are those raw materials approved to be used in?
- At which manufacturing locations are these raw materials approved?
Technology can help manage these challenges by allowing for more flexible associations within a platform.
TG: Why is networked product development critical now?
CL: One industry trend we see globally is companies divesting themselves of the ownership of manufacturing. It allows for a more agile enterprise.
Contract manufacturers are specialized, and they work with the proper equipment for a given product or line of products. For brands bringing new products to market rapidly, it makes sense to collaborate with a facility that already has the infrastructure in place. For example, you might do a line extension with a different contract manufacturer because of their specialization.
This strategy works exceptionally well for emerging brands but is also entirely suitable for established brands with existing manufacturing infrastructure. It’s not just financially savvy but being able to manufacture closer to your customers in other geographies helps with sustainability efforts. But the proper management of these relationships and their entanglements is the challenge to solve. Stay tuned…
TG: What are some benefits users will see?
CL: One thing I’m excited about is something that will tie all these things together, and that is to facilitate and provide an accurate digital space for collaboration, iteration, and innovation between brands and contract manufacturers and the products they create together.
Much of the PLM software we’ve looked at doesn’t offer true collaboration. It does a good job facilitating the record associations, but it doesn’t necessarily provide a user-friendly space for both sides to work together actively.
The other area where our technology can help with rapid innovation is letting companies leverage our marketplace data. For example, people in R&D can quickly create proof-of-concept recipes by pulling in and reviewing multiple data sources for ingredients they want to incorporate. Then, they can quickly compare and gauge the acceptable threshold and rapidly iterate on formulations to see how that would impact nutritional values, allergen profiles, and preferred marketing claims.
So, once a user has found one or more sources of an ingredient in our marketplace, they can save and associate them and their data with their own R&D items in our system. They can then use those to create or augment their own recipes and formulas. Finally, they can quickly and securely socialize that proof of concept internally via our Specification Management module by sharing a draft specification with your collaborators.
TG: You mentioned claims management and substantiation. How is that accomplished?
CL: We have a sophisticated, highly configurable claims management capability that allows users to check across any record type within the system, meaning you can run claims against a formula, and the system can look back via the digital thread to the items that are coming from your suppliers. For example, you could write a claim requiring all the sourced items for a formula to be certified organic, kosher, halal, or not sourced from a particular country, or devoid of allergens that you declare, and so forth.
Our marketplace – combined with our formulation management – lets you prequalify new vendors and ingredients, create experimental formulations that meet your business requirements, and then reach out to the vendor to commence the business relationship. We call it Networked Product Development.