Five Rules to Supply Chain
Below I have stated the five most important rules of Supply Chain according to me, please feel free to alter, add, change or remove to create your top five.
1. The location of inventory and inventory itself is of interest to everyone in the supply chain, therefore should receive investment from all sides, whether it be in time or software.
2. The customer is by far the most important aspect in the demand chain, delivering customer value is critical.
3. Keeping the flow of goods to the customer is of most value; therefore the need to be smooth, fast and reliable is crucial.
4. Reliability is of upmost importance, reliable lead times are more important than the length of them.
5. Insuring your supply chain is pulling its weight is important but if others in your demand chain are not performing everybody suffers. The customer is the end goal and should be everybody’s target.
Please create your own top five, enjoy and subscribe.
Chris
Thursday 1 October 2009
Friday 24 July 2009
Becoming Demand Driven
Become Demand Driven.
Supply chains have historically focused on an internally-driven planning model. Demand forecasts were developed and internal capacities were aligned to the forecast. Execution was a well defined series of linear steps and the supply chain ran smoothly provided there were no unforeseen demand changes or supply disruptions. When changes did occur, they were both difficult to sense and often impossible to respond to.
Nowadays, the simple “plan-then-execute” operating model is no longer acceptable. To succeed, organizations needed to reinvent themselves. Internally-driven planning has to be replaced by market- driven execution. Actual customer demand, not forecasts, becomes the centre of the operating universe, around which all capacities — both internal and external — are aligned. While the original demand forecast remains a key step in the process, it must be complemented with real-time sensing of changes at the forward-most location and the ability to translate those changes into a fully- constrained operational plan that is both communicated and executed across the trading community.
The financial impact of the demand-driven transformation is immense. Based on extensive studies, AMR Research projects that a demand-driven company can generate the following results:
• 10% increase in revenue
• 5 – 7% increase in operating margin
• 15% decrease in inventories
• 35% decrease in order-to-cash cycle
I would be very interested to hear your opinions on this.
Supply chains have historically focused on an internally-driven planning model. Demand forecasts were developed and internal capacities were aligned to the forecast. Execution was a well defined series of linear steps and the supply chain ran smoothly provided there were no unforeseen demand changes or supply disruptions. When changes did occur, they were both difficult to sense and often impossible to respond to.
Nowadays, the simple “plan-then-execute” operating model is no longer acceptable. To succeed, organizations needed to reinvent themselves. Internally-driven planning has to be replaced by market- driven execution. Actual customer demand, not forecasts, becomes the centre of the operating universe, around which all capacities — both internal and external — are aligned. While the original demand forecast remains a key step in the process, it must be complemented with real-time sensing of changes at the forward-most location and the ability to translate those changes into a fully- constrained operational plan that is both communicated and executed across the trading community.
The financial impact of the demand-driven transformation is immense. Based on extensive studies, AMR Research projects that a demand-driven company can generate the following results:
• 10% increase in revenue
• 5 – 7% increase in operating margin
• 15% decrease in inventories
• 35% decrease in order-to-cash cycle
I would be very interested to hear your opinions on this.
Tuesday 21 July 2009
NEW IN SUPPLY CHAIN (TOP 5)
New in Supply Chain (Top 5)
This is again a blog in which your opinions are very important as they are the key building blocks for improvement.
This is to be a series of blogs that will all link together in order to find what is most important, the most intriguing topics will be carried forward to open up a new discussion.
So let’s start it off as simply as we can. I would like everyone to list the most problematic issues you can thing of, come across, have to deal with, are aware of in the supply chain environment.
From this we can get an idea of what are people’s biggest issues and work together to propose solutions and ideas on how to improvement. Whether it be a solution out there now or ones we all need.
If you have any comments on others issues/problems them please make them heard.
I will start the ball rolling on this topic by noting my issues, please comment and contribute.
Issues I see in supply chain.
1. If people have read my blogs before they will understand this on, communication in supply chain. The problem of fully understanding the needs of the other parties in the supply chain. Changes are made all the time in the chain, it is a living system and by limiting this to one window normally at the end of the day to project forecast and drop its figures is not enough.
2. Promotions can be a tricky affair often removing an entire buffer, which again has knock on effects. This can be cause by little warning from retailers.
3. Unforeseen errors cause for stock being held up or undelivered, when other
products need to be rushed in, when will these two areas become merged? Allowing me to allocate stock at the last minute, saving me stock out issues and increasing my revenue.
4. Trawling through data sent in by the retailer often in excel format, this colossal amount of information (balance on hand, store forecast etc...) always has data I do not need, want or require in order to do the job. I would like something that would show me where problems lie, what differences there are in comparison to other periods in time, how the sales have effected stock levels throughout the chain.
5. Getting poor performing suppliers to improve their system.
I would like to hear about your issues, I will comment on all. Please have fun with this.
This is again a blog in which your opinions are very important as they are the key building blocks for improvement.
This is to be a series of blogs that will all link together in order to find what is most important, the most intriguing topics will be carried forward to open up a new discussion.
So let’s start it off as simply as we can. I would like everyone to list the most problematic issues you can thing of, come across, have to deal with, are aware of in the supply chain environment.
From this we can get an idea of what are people’s biggest issues and work together to propose solutions and ideas on how to improvement. Whether it be a solution out there now or ones we all need.
If you have any comments on others issues/problems them please make them heard.
I will start the ball rolling on this topic by noting my issues, please comment and contribute.
Issues I see in supply chain.
1. If people have read my blogs before they will understand this on, communication in supply chain. The problem of fully understanding the needs of the other parties in the supply chain. Changes are made all the time in the chain, it is a living system and by limiting this to one window normally at the end of the day to project forecast and drop its figures is not enough.
2. Promotions can be a tricky affair often removing an entire buffer, which again has knock on effects. This can be cause by little warning from retailers.
3. Unforeseen errors cause for stock being held up or undelivered, when other
products need to be rushed in, when will these two areas become merged? Allowing me to allocate stock at the last minute, saving me stock out issues and increasing my revenue.
4. Trawling through data sent in by the retailer often in excel format, this colossal amount of information (balance on hand, store forecast etc...) always has data I do not need, want or require in order to do the job. I would like something that would show me where problems lie, what differences there are in comparison to other periods in time, how the sales have effected stock levels throughout the chain.
5. Getting poor performing suppliers to improve their system.
I would like to hear about your issues, I will comment on all. Please have fun with this.
Thursday 9 July 2009
Community Supply Chain - The Concept
"Community Supply Chain" what does it really mean? What is the concept behind it? How does it work? What would the benefits be? ... I could keep asking questions, I could go on and on about the differences it would make. But to be quite honest I already know what they are, what I am interested in is what you think.
But to get you started I will explain what it is, and the idea behind it.
Imagine if you will an entire supply chain in all its working glory. Now I’m not just talking about what one person’s view is, but more from end to end. From raw materials through to the consumer. A long lengthy process involving many different people in many different job roles all feeding from the same troff. Now that is one messy complicated line of events, problems are bound to come up, which are sadly inevitable.
Companies have spent years and millions of pounds trying to fix or at least improve the smoothness of the chain and will continue to do so. This is where “Community Supply Chain” comes into play. How valuable would it be if we could all see the entire chain end to end? 100% visibility?
A picture of the full supply chain, a system we can interact through, meaning no more phones, no more faxing, no more printing out forecast sheets which are a day old. An online interactive system, continuously flowing, as if it was alive.
We could see where the problems lie, with whom they sit and how they’ve been created. We would have clarity of vision, a chance to see how we could improve things. It would give me more time to act on issues and be easier to control. So why is this not being done? Sadly I cannot seem to answer that question, maybe you could?
We hit upon this idea of networking as soon as the Internet came about, but have never adopted it in supply chain, why not? Why are we not working together more? Why are we only fixing our own problems when others affect us just as much as our own?
All the questions above point only one way to me, “Community Supply Chain”. Can anyone else think of a way to take supply chain issues to the next level?
I would really like to hear your thoughts on this, what “Community Supply Chain” means to you? How you would see it helping, where the problems in the concept lie? And the big one, would it work?
But to get you started I will explain what it is, and the idea behind it.
Imagine if you will an entire supply chain in all its working glory. Now I’m not just talking about what one person’s view is, but more from end to end. From raw materials through to the consumer. A long lengthy process involving many different people in many different job roles all feeding from the same troff. Now that is one messy complicated line of events, problems are bound to come up, which are sadly inevitable.
Companies have spent years and millions of pounds trying to fix or at least improve the smoothness of the chain and will continue to do so. This is where “Community Supply Chain” comes into play. How valuable would it be if we could all see the entire chain end to end? 100% visibility?
A picture of the full supply chain, a system we can interact through, meaning no more phones, no more faxing, no more printing out forecast sheets which are a day old. An online interactive system, continuously flowing, as if it was alive.
We could see where the problems lie, with whom they sit and how they’ve been created. We would have clarity of vision, a chance to see how we could improve things. It would give me more time to act on issues and be easier to control. So why is this not being done? Sadly I cannot seem to answer that question, maybe you could?
We hit upon this idea of networking as soon as the Internet came about, but have never adopted it in supply chain, why not? Why are we not working together more? Why are we only fixing our own problems when others affect us just as much as our own?
All the questions above point only one way to me, “Community Supply Chain”. Can anyone else think of a way to take supply chain issues to the next level?
I would really like to hear your thoughts on this, what “Community Supply Chain” means to you? How you would see it helping, where the problems in the concept lie? And the big one, would it work?
Subscribe to:
Posts (Atom)
Posts
