Insights

Greater Visibility Leads to a More Optimized Supply Chain

Greater Visibility Leads to a More Optimized Supply Chain


Feb 08, 2017
Manufacturing and Distribution

 

How much do you know today about your supply chain? Are you able to forecast demand and continually realign with store and/or distribution center inventory? Are your production and material plans synced with up-to-date order/demand information? Do you know how much time customer service reps have to spend on issue resolution rather than on strengthening your customer relationships?

Only with broad and deep visibility into all functions across your supply chain—raw materials, suppliers, manufacturing, warehousing, distribution, and customers—will you have the data necessary to extract insights that lead to better processes and better results.

What’s important here are the words “across your supply chain.” Too often, optimization happens only in functional silos. The result is inefficient efficiency—efficiency that’s not extended throughout the organization and therefore has little impact on growth, if any at all. In fact, this can even lead to greater inefficiencies in optimized areas. You might optimize your transportation, for example, but what’s good for transportation may have the opposite effect on your warehousing efforts.

The purpose of all this visibility and optimization, of course, is to better support customers and grow your business: visibility leads to insight, which leads to optimization, which leads to happy customers and profitable growth.

So, how do you go about getting that visibility into your supply chain? Here’s a brief overview of the basic steps required:

1. Define Your Goals

Work with colleagues, suppliers, and customers to determine your supply chain goals, and understand that achieving these goals is a company-wide effort, not the responsibility of any single area. Here are some of the most common challenges that are turned into goals:

  • Improve fill rates
  • Reduce order cycle times
  • Improve asset ROI
  • Increase throughout
  • Increase inventory turns
  • Reduce transportation costs
  • Improve margins
  • Reduce overhead costs

2. Put the Right Tools in Place

Today’s sophisticated planning technologies give you the visibility you need to reach your company’s goals. An enterprise resource planning (ERP) solution is arguably the most effective tool available because it integrates all functional areas of your organization, giving you a complete and detailed view of your supply chain, with real-time order, inventory, and shipment data—your entire order-to-cash process.

3. Set KPIs, Track and Analyze

What gets measured gets improved, so once you have an ERP solution in place, your business consultant will work with you to establish data collection needs from across the organization, and put together a process for acting on the insights it provides.

4. Optimize for Cost Savings and Process Improvements

This is where all that data and the insight it provides into your organization are put to work. With the help of your business consultant you’ll see opportunities to improve, and will have what you need to take action more quickly and more effectively.

Real improvement isn’t possible if you don’t know where your problems are. A comprehensive picture of your supply chain is imperative in order to grow profitably, and is key to a process that starts with setting smart goals, taking advantage of technology to extract the right data from across the supply chain, monitoring and analyzing that data, then taking steps based on what you learn. The result of this process? Visibility, insight, optimization, happy customers, and profitable growth!

Author(s)

Suzanne Koss
Suzanne Koss, CPIM
Partner
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