Should I make or buy? Should I make to order or make to stock? Where should I keep my inventory, close to my client or in my factory? How much should my safety stock be and when should I reorder? How can I minimize my supply chain costs? Is inventory an asset or a waste?
Companies have always been tormented by these questions. The answer is not hidden in their supply chain network; it is the supply chain network itself. Companies that acknowledge their supply chain as a strategic asset achieve 70% higher performance.* In order to move towards the efficient frontier and achieve higher performance with minimum supply chain costs, a company should understand its uniqueness. Each organization has a unique makeup or configuration. Accompanied by a differentiated brand promise, this configuration can lead to the ongoing evolution of supply chain intelligence. But how can supply chains get smarter nowadays?
What do you do when you seem to have exhausted all options for further inventory reduction, footprint reduction, transport bill reduction, or working capital reduction, and your board demands these things of you once more along with further performance improvements? You’ve gone through all the major Lean programs, adopted 6 Sigma along the way, implemented TQM, deployed the finest forecasting software and tested out multiple vendors only to find yourself at a loss for new options. When you find yourself in this kind of situation, it’s time to move towards an integrated supply chain.
Changing market conditions are driving companies to reimagine their supply chain and push the boundaries of conventional thinking. Gartner’s upcoming Supply Chain Executive Conference will delve into key tactics, tools and strategies supply chain leaders can employ to foster growth and efficiency amid rising competition and economic change.
It’s a theme typical to Gartner and their conferences: very strongly focused on global trends, combined with a top-down view on supply chain concepts, approaches, methods and maturity levels. With 750 analysts worldwide, they are capable of putting structure into almost any aspect of supply chain development. But let’s face it, this wealth of information can also be difficult to process: which insights are applicable to your company, how can you apply them to your own supply chain, what should you prioritize? Obviously, you can’t keep up with all their combined output, but they can help you with that as well…
Visiting the LogiChem conference last week in Antwerp, I was pleasantly surprised to hear many presentations focusing on supply chain opportunities instead of doom scenarios.
According to analyst J. Witteveen from ING, the European chemical market is characterized by under-capacity, low margins, consolidation and lower demand. A pessimist would be discouraged by this. An optimist sees opportunities to grab market share. I met a lot of optimists in Antwerp.
Management genius Eliyahu Goldratt published his bestselling book Necessary but not Sufficient in 1998. It is still a compelling story about how enterprise resource planning systems lack the ability to create significant value for organizations.
Now fifteen years later, Sales & Operations Planning systems seem to be demonstrating a bit of ‘necessary but not sufficient’ themselves. In both cases, organizations assumed that one global planning system would give them the ultimate visibility, agility and significant cost savings.