Archive for the ‘News’ Category:
Supply Chain Priorities for Year 2009
No doubt year 2009, after the economic slowdown of 2008, which shattered the economic fundamentals through out the globe, going to be totally different from the previous years of the economic prosperity, yet industry and economy yet needs to survive on the positive note, despite, whatever may remain the condition of the economy. As with reference to the Supply Chain Management, the five priorities which have emerged for supply chain management to prevail through out the year as from the researcher’s preview. In the backdrop of rising commodity prices the top supply chain priority set for the year are driving store traffic, controlling costs, driving revenue, attracting new customers and assuring customer satisfaction.
Accurate business forecasting is of top priority in this list as huge investments are made into marketing, product development, production, inventory and distribution and accurate forecasting can make investment least risky as far as Supply chain priorities are set for the year 2009. Moreover, forecasting for Limited Time Offers (LTOs) is of the great importance due to the 75 percent of investment included in it, involving discounts, combos, new items and new price points to drive store traffic and attract potential new customers in competitive economic environment.
The next important part after forecasting of the highest priority is Inventory management with putting right thing in the right place in right order. To locate the best suppliers is another area of higher priority with complete visibility of a central repository for item, supplier shipment, and perhaps most importantly contract pricing data so the nice product with the best prices can be retained within limit. Freight Management and Rapid Return on investment are needed to be carefully looked as Supply Chain Priorities for Year 2009.
Subscribe to the comments for this postSpread Sheets to Help In Managing Supply Chain Optimization
Spreadsheets play an important role in designing a supply chain management project as by the method of data analysis and cleansing the spread sheets. However, any mistake while made in analyzing spread sheets can cause risk in decision taking processes in Supply Chain Optimization.
According to a research, simplest of spreadsheets are not tested independently and there chances of material error lies up to the extent of way over 90%. So these errors can be improved through employing risk management tools to reduce the chances and impact of calculation errors made in spreadsheets. There are also other methods to reduce the chances of error like grouping the spreadsheets on possibility of occurring mistakes and employing certain methods for eradicating problems from the spreadsheets.
However, the best method to keep the spreadsheet risk at bay is distribution of right resource to the right projects and the members working on the project should have a proper IT skill as well as business acumen as to reduce the chances of mistake to as lowest as possible. IT skills diminish the chances of making error to the minimum and business acumen reduces helps to recognize earlier made mistakes.
The right decision support systems are great in reducing risk profile in analytical supply chain projects. They are equipped with advanced solution reporting, mapping and error debugging functionalities. This way supply chain management can be properly handled effectively having error free uses of spread sheets in supply chain management.
Importance of Purchaser in Supply Chain Management
The purchasing department and guys working in the purchases department share a very high level of responsibility in terms of quality assurance. However, for previous some years purchase department of a company has gained a very high level of acceptance compared to older days when they used to negotiate with account department to get their bills to be cleared out.
Purchasing knowledge now has a lot to do lot with professionalisms in design and manufacturing decisions and other business strategies. A good purchasing executive provides company an edge in competition, optimize transactional efficiency and maximize shareholder value by attentive and careful supply chain management.
So, a purchaser with more focus on quality is now an imperative part of cross-functional teams as to help in product designing, through testing, global sourcing, production and marketing. So in order to provide better and good help a purchaser should have certain good skills to overcome all the problems and to reach at its best potential.
The very necessary skills as required by companies are cost analysis skills as to asses the right value of the product instead of face value. Analyzing longer supply chain to avoid over dependence on the local suppliers should have management skills as to properly handle concerned departments at the spending time. Capability of assess the internal risks in supply chain and skills to execute a plan. Thus the role of purchaser has increase manifold in modern day supply chain management.
IT with Changing Supply Chain Scenario
Legacy supply chain programs that were formed with an aim towards improving efficiency, after investing million of dollars resulted only into a deployment cycles only to be used by a few highly trained and skilled people.
These legacy programs that were framed from using complex mathematical models for heavy manufacturing sector became useless in a present heavily outsourced and extremely dynamic world, where assumptions and concepts keep changing all the time. These plans based on assumption are detrimental on the basis of data preserved in spreadsheets are less practical thus results in lesser customer satisfaction, operating costs and margins, etc.
So IT departments of the companies need to be extra cautious when planning strategies and especially with an attention on changing business environment with integrated and collaborative demand-supply planning, monitoring and response system so a man could make right decision and judgment when executing a business idea or during routine business operation. Despite of variety of budgetary constraint an IT department of a company can bring forth a good number of positive results.
For Cost Cutting Include Lean in Supply Chain Perspective
As there many steps are employed in supply chain industry, the best can be termed like as segmentation of the customer base to provide well built and advanced services, increased transparency and forecasting abilities, taking advantage of latest support system and technologies.
The supply chain management has changed a lot in recent times from what it used to be 10 to twenty years ago. Two decades back there was more focus on controlling cost instead of other operations. However, with span of time even in supply chain, concepts like strategic sourcing, sharing real-time data and inclusion of suppliers in devising strategy in new product and services.
As with the introduction of new concepts, the professionals even in supply chain management has adopted themselves as according to the need and requirement of the latest period with the need of their respective organizations. They are now concentrating more over co-ordinating over various functions of the organization. They are now more focussed toward tracking and measuring risks to the supply chains. The more dedicated and concentrated efforts focusing with certain resources for the regular improvement resulted in the form of Lean Projects.
Lean strategy is more weaved around to eliminate waste in supply chain management. Still with prevalence in other industries is even quite popular in manufacturing industry. The lean projects got wide acceptance in supply chain due to capacity of saving that waste which is not visible to the naked eyes. A leaned process happens to be short, low level of operation and very short lead times to complete new orders resulting into the highest level of customer satisfaction.
Lean can help to save a large number of costing otherwise wasted during the processes of important operations like sea freight, air freight, rail freight or trucking and many other possible ways for price saving. Lean helps in great way for improving resource allocation scheduling and material handling. According to a large number of lean practitioners the biggest scope for the improvement in supply chain is better management of orders and quick delivery.
One can focus on proper training of SCM team in the Lean principles, tracking and eradication of basic problem not symptoms and follow principles of cycle time, throughput, work-in-process (WIP), yield, and uptime.
Risk Managers in Supply Chain Management
With the expanding nature of International businesses, it has become quite imperative for business managers and especially for the people in supply chain to assess the damage and risk to the business.
As, the present International Business scenario has changed, outlook, towards the supply chain risk management, as the risk exposure has generally delved into the all operational functions of the business. Therefore, on the part of senior management a comprehensive risk management program is thus needed for an overall performance of the business to effectively manage risk proposition in the business.
As a number of processes like offshore manufacturing, global outsourcing and lean sourcing are some of the processes which impact supply chain process and supply chain risk management that has become an integral and important part of vital risk management priority. In the counting for a prioritize risks as faced during supply chain, the main type of risks as faced are brand and reputation issues, regulatory compliance, product safety and catastrophe exposure at the risk problems.
Hence, due to the changing nature of the business, the risk managers are now involved into the task of risk management in a variety of manufacturing operations thus developing a more complex communication pathways and greater demand for identification, measurement and financing of risk mitigation related to possible business losses.
So to develop a healthy and successful manufacturing chain is primary task of the risk mangers. And a risk manager needs to take care of all the essential tasks and get himself familiarized with all the components for a successful business entrepreneurship. He should be a person to take care of certain supply chain decisions as to its fullest exposure and access.
A risk manager should follow certain procedures as to make it an effective decision with perspective to supply chain management. He should identifying and prioritizing critical business elements, map the entire supply chain to show interdependencies, to judge the potential failure points along the supply chain. This way a supply chain manager can bring about a very radical change in managing risks in supply chains.
Best Practice is the Best Implementation of Idea
Whenever starting Supply Chain Management or some other major project there an initial debate gets started with incorporation of best practices on the performance of project in breeding period or commencing production. As recently a debate undergone between SCM leaders about starting a global company project that may get started in 2009.
This conception by the SCM leaders is woven around defining a company that may deal into everything from consumer electronics to building materials to health care products. As defining the best practices into the business project they are actually merely not meant for as practice in software or a power point presentation.
As for the term of best practice, it is wide norm with the companies, that they keep there some innovative practices as a secret and hardly divulge it out and around. But rather well deserved best practices are the result of regular experimentation and should be used widely as “Best Acceptable Practices” instead of merely Best Practices. So idea for any practice or solution is that can be best implemented within the practice of organization. It can be defined in the term like as a mediocre idea implemented brilliantly is far good than brilliant idea implemented in mediocre way.
Other strategy with Supply chain management companies is that they are sometimes over depends on the opinion of Program Management they are more believed to concern with theoretical part of practice instead of practical implementation. These examples and practices say any practice in actual way is not worth while and best unless it is acceptable and implantable.
So it is best for the business do not believe anything to be the best that is told you to be best instead and bring out something best after implementing it in the best manner.
Financial Crisis Hitting Supply Chain and Solution to the Problem
As economy is getting into the recessionary phase and the credit problems in financial markets, it is also assumed for supply chain sector that the new money will reach to them only from the end customer. However, this is not possible in view of need for capital investment as without investment in new plant, equipment, materials, research & development, suppliers, education, etc.
So this financial crunch, definitely, would pose a serious problem for suppliers to get resources to compete for business, development of new products and investment in news projects and assurance against negative cash flow in the starting phase of new product insemination.
So crux of whole thing is that in new economy, the creation of wealth is of more importance than horse trading of wealth and the problem can be solved only after with financial institutions ability to pay loan to get some better results. That is also equally true in this situation that economy may not grow with as expected higher rate and a person may sustain with reasonably minimum profits.