Well, being a student of business administration I always try to mess up with upcoming features related to supply chain management.
Like as other common business students, I also have a lot of questions about managing supply chain efficiently and study more and more about it.
- And how to manage ourselves in competitive environment
- What kind of sharp and smart approaches to be used to control outputs?
- How to maintain flow of supply to end users with less freight and time consumption ?
- How to deal with short time limits and maximize ourselves with market demands?
- On which analytical tools to incorporate specific products with specific demand range ?
Ever you dream off for a story for Supply chain management ?. Hopefully you all didn’t.
But I have to tell you a story from the Novel "The Goal" written by Dr. Eli Goldratt, also famous for his "theory of constraints". His novel "The Goal" was about a leading character named "Alex Rogo" was a factious plant manager, who battled to turn things around a struggling production plant using innovative and basic techniques bottleneck management.
Alex discovered, as did the reader, that optimizing locally everywhere
in the plant did not result in the global optimum; instead, manufacturing throughput was best enhanced by managing critical production constraints effectively.
The most interesting part of the story is its moral "Ultimate goal of any business enterprise is to be profitable, ahead of any other important numerical metric".
Effectiveness of Supply chain for Business
So I am totally agree with this theory, hence now a days scope of constraint-based optimization of business has extended beyond the factory to include procurement,
production and distribution.
Supply chain management playing a critical role for business success and evolved into science rather then art, with chief supply chain officers in command of global supply chains at many corporations.
Although profitability continues to be paramount, the business environment for manufacturers has become much more challenging. Due to such concept many manufacturing companies are struggling hard to achieve end-to-end supply chain excellence as a 1st priority.
Current State of Supply Chains
Slowly, but steadily, the supply chain networks become more and more complex and geographically disparate. As now a days customers and more demanding and well aware about products, and can also compare them so need of effective supply chain management is crucial for any organization globally. Customers can be anywhere and if you did not entertain him first, may be you loose him forever, and loosing a customer, a potential customer is not affordable for a business.
Across a diverse range of automotive, consumer electronics, consumer packaged goods, chemicals and pharmaceutical companies, manufacturers have been forced to introduce more new products to retain and grow market share.
How to generate Supply Chain Excellence ?
Despite these hurdles, many companies have learned how to achieve supply chain excellence. These market leaders adhere to the following five core tenets:
- Embrace Customer Centricity theory.
No doubt, it's a big difference of approach towards better future. Customer is always what a business needs, and without this remaining theories can not be implemented. Focusing with customer demands across all channels becoming increasingly important and volatile, leading companies are focused on understanding their end users better. And the most interesting part of this approach is that, they are not only business-to-consumer companies,
where the manufacturer has direct visibility into the end consumer, but also at business-to-business companies where the end customer may be just a few layers removed. Customer centricity goes beyond customer satisfaction surveys; it is about understanding what different customers buy, what influences that buying
decision and how they buy. Leading manufacturers have learned from retailers in this regard, in that they are now able to define different customer persona and associated buying behaviors.
- Differentiate Service through Segmented Supply Chains.
Being a customer-centric business many strategies often result in manufacturers taking different value propositions to market to meet the needs of different customers with different needs and behaviors with predefined corporate objectives.
For instance, when pursuing market share growth for certain product-geography-channel combinations, manufacturers may need to adopt one supply chain posture: aggressive and dynamic pricing, high-product availability and superior lead times. When looking to retain market share for other product-geography-channel combinations, the supply chain posture may be different: fixed pricing and
competitive lead times.
- Agility Design for Business
Adapting effectively — and rapidly — to internal and external change is the essence of business agility and same as to supply chain effectiveness. How long does it take for a demand change in a particular business area and how to be captured and reflected to all relevant portion across the supply chain?
How quickly is this change comprehended on the supply side and reflected in adjusted inventory plans, master production plans, factory plans and distribution plans?
How soon do suppliers know what they need to do differently to accommodate this change?
If there is a delay or disruption at a supplier, how quickly can a manufacturer determine the potential business impact and determine mitigation options?
These all questions are not just only question but all having a single solution with them named "Agility". And being a leading corporation these questions should be addressed with agility and by redesign whole existing supply chain infrastructure.
By implementing quality management and smart study of supply chain management a business can be a successive business.
- Over-and-Over Synchronization
Supply chain management is not a one or two day practice, and not limited to a single portion of business procedures. It's ranging from forecasting customer demand to positioning corresponding supply and creating optimal procurement plans.
These disciplines span functional roles across sales, marketing, business units, manufacturing operations, procurement, engineering and finance. Given the pace of change corporations face today, it has become increasingly important to keep internal and external stakeholders aligned with the most current business plan. Over the last decade, and especially since the global financial crisis a few years ago, leading manufacturers have focused on driving rapid synchronization across different functional stakeholders internally and externally through the systematic deployment of sales and operations planning (S&OP), also referred to at some companies as integrated business planning.
- Decision-Support Technology and Deployment Models.
By default every business has decision making ability, that can be about various limits, less or more, but how to deploy these decisions throughout the organization is a hot question to be answered.
Decision- Support system is the key solution which help to deploy effective core principles for maximum output from all supply channels and being improved by technological involvement.
While the rigor of mathematical optimization continues to be relevant, significant energy has been devoted in recent years to help make supply chain systems easier to deploy and use.
In addition to providing in-depth optimization recommendations across different supply chain processes, these systems now place special emphasis on facilitating continuous learning through a closed-loop process for end users. Additionally, the advent of cloud computing has also made the deployment of advanced planning and scheduling systems much faster and easier.