@ Supply Chain Management


Top Supply Chain Initiatives

SDExec.com (Supply & Demand Chain Executive magazine) reports on the top supply chain initiatives extant in the market today. Their article is based on the results of a survey by E2open which was conducted

at the fourth-annual SAP Logistics and Supply Chain Management 2007 conference, held in Orlando, Fla., had conference attendees from more than 160 companies rank the top supply chain initiatives that enterprises are undertaking

And who is E2open?
Short answer: They are a SCM software services provider with a multitude of offerings that range from visibility to partnering and execution.

In brief, their findings as interpreted by me:
1. A firm thinks of its supply chain in a global context and thus creating an internal operations group that reflects not only such global operations but actually needing to and getting to integrating these functions together.
2. Global initiatives picked from the following set:

* Globalization to leverage economies of scale across multiple operating units
* Lean demand-driven supply chain
* Operations and sourcing in low-cost countries (China, etc.)
* Outsourced manufacturing and design
* Process automation, such as vendor- or supplier-managed inventory (VMI or SMI), international procurement office (IPO) and trading center (ITC), etc.
* Trading partner integration

3. Global Platform

The new global organization and initiatives must be supported by improved visibility to timely and accurate supply chain information and greater control over the processes that span across companies in the extended supply network. A new shared platform is required to synchronize processes and information across all participants in the end-to-end supply chain, extending internal processes and systems and leveraging the investments made in traditional enterprise applications such as enterprise resource planning (ERP), supply chain management (SCM) and product data management (PDM) systems. This platform must support the very different architecture, technical, security and operational requirements of a multi-enterprise solution.

In this business, you’ve got to be good at marketing and whoever wrote the above is trying very hard.

According to the survey, the highest priority supply chain initiatives were:

* 48 percent of survey respondents identified lean supply chain — eliminating waste and unnecessary steps, for example, by evolving from a “push” to “pull,” demand-driven strategy;
* 45 percent identified operational improvement programs — obtaining visibility into supply chain information by replacing manual processes with automation (automated VMI/SMI programs, IPO/ITC, etc.);
* 39 percent identified globalization — leveraging economies of scale across multiple operating units;
* 29 percent identified improvement in trading partner integration by migrating from legacy systems to multi-enterprise supply chain platforms — replacing legacy collaboration applications and B2B gateways.

And the top business objectives the above supply chain initiatives were meant to address:

* 66 percent cited reducing operating costs;
* 52 percent cited reducing inventory;
* 41 percent cited improving on time delivery;
* 39 percent cited improving availability and cycle times.

An interesting piece of info from the survey regarding partner integration or how firms in the supply chain communicate:

* 44 percent are using EDI
* 42 percent are using e-mail
* 29 percent are using Excel spreadsheets

Now, that’s an opportunity.

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Category: Supply Chain Management


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May 2007