Improving Visibility is near the top of the priority list for many supply chain managers, but the topic nevertheless remains somewhat vague and fragmented for many companies.
Yet the growth of global markets, increasing customer expectations, rising costs, and more intense and diverse competitive pressures are driving the development of new supply chain strategies and intricate network designs.
That increasing complexity is exactly why supply chain networks need to be frequently re-evaluated. In fact, a world class supply chain network is essential for product to consistently flow from the point of manufacture to the end user, regardless of the industry served.
A well-designed supply chain network can significantly improve margins, support expansion into new markets, enhance the customer experience, and reduce operating costs. That applies to companies in all stages of maturity: Growth-oriented companies, companies in transition, and companies with stable business operations can all benefit from distribution networks that are optimized to meet ever present challenges and opportunities.
While there are more tools available than in the past to perform a network analysis, there remain a number of important steps that must be taken. In this article, we present a blueprint for successful supply chain optimization.
It Starts With a Network A world class, transformational supply chain begins with a network that employs an all encompassing view of the various business areas that manage delivery of products to customers. The result is significant capital, operational, and tax savings while achieving optimal customer satisfaction.
There are three critical elements to a world class supply chain network. With complex and competing business goals—such as minimizing capital, improving operating margins, lowering the carbon footprint, and enhancing the customer experience—a clear and concise supply chain strategy must be fully aligned with your business strategy.
Surprisingly, many companies begin reducing network costs before they define how the network can be fully leveraged to support the business strategy. Uncertainty in product mix and volumes, expanding markets, margin goals, dynamic customer service strategies, value-added opportunities, and product returns and obsolescence are just some of the considerations that are often given minimal consideration or overlooked entirely.
Focus on Total Profit Optimization. An increasing number of companies are asking the question: Currently, a combination of operating scenarios are required that drive alternative network models.
Then sensitivity analysis is performed to evaluate impacts on how a company is working to improve the parameters it uses to drive shareholder value. EBIDTA, capital employed, working capital, operating expenses, tax effectiveness, margins, and cash-to-cash conversion. Project Versus Ongoing Process.
World class supply chain networks evolve as sourcing adapts to market changes, product line performance varies, and companies integrate. A world class network incorporates an ongoing process that focuses on the flexibility of the supply chain and ensures that objectives are met consistently and over a range of market conditions while enhancing the key drivers of shareholder value.
Frequency and Types of Analyses When an organization decides to evaluate its network, the internal leadership team must first address the type of effort that should be performed. Strategic reviews of a distribution network design often follow: There are various methods of planning when it comes to guiding and positioning an organization.
Planning needs to cover predictable and unpredictable circumstances. Without sound plans, a firm risks insufficiently anticipating problems and failing to implement solutions within the required lead time.
With plans, a company becomes active and not passive. A good framework for planning is illustrated below. The goal of strategic planning is to define the overall approach to stocking points, transportation, inventory management, customer service, and information systems as well as the way they relate to provide the maximum return on investment.
It addresses such issues as organizational structures, realignment of capacities, network planning, and impact on the environment. Strategic planning is also a proactive tool designed to guard against predictable changes in requirements in which timing can be anticipated.
This type of planning is directed at forecasting needs far enough in advance to efficiently allocate resources across the supply chain.
Granted, forecasting with a long planning horizon is a risky business, and distribution plans based on such forecasts often prove unworkable. Tactical Planning The tactical planning timeframe is one year to two years.
Tactical planning must anticipate the distribution center workload to prevent overloading the primary resource—the workforce—during peak demand. In addition, the tactical plan defines how to develop the resources needed to achieve the goals in the strategic plan.
For example, if a firm decides in its strategic plan that it requires a new warehouse location to enhance customer satisfaction, then the tactical plan allocates resources for the facility.
Tactical planning first attempts to provide timing for each step.
Second, it considers major issues, such as identifying specific skills required to accomplish the plan and the time needed for each step.
Third, specific capital requirements are identified for each step.Triple Point's WAM Supply Chain Optimization provides supply chain solutions for the process industry that enable process manufacturing companies to achieve supply chain excellence with advanced planning, optimization, and business intelligence tools.
A USD Supply Chain Management degree gives students the advanced expertise needed to progress companies to world class supply chain management status.
Whether you are looking for help in choosing the right supply chain management software or advice on how to make your supply chain work more efficiently, the following tips, from supply chain management experts and managers, can help.
chain recommendations or working with supply chain partners (14 percent responded “always,” 27 percent said “sometimes”, and 13 percent replied “rarely”). Organizations with job roles specifically related to supply chain strategy refer. Laura Matei – Strategic Projects and Supply Planning Manager at Ursus Breweries “I have been working with Diana on a daily basis for more than 1 year.
During all that time, she has proven to be a very hard worker, yet always able to keep her enthusiasm and involvement on a high level. She always [ ]. Gain visibility with the right 3PL provider: LEGACY offers full-service logistics and supply chain solutions, backed by highly responsive service.