How the New Trends Changing the Supply Chain Management

How the New Trends Changing the Supply Chain Management

How the New Trends Changing the Supply Chain Management

How the New Trends Changing the Supply Chain Management

To capture the market share companies increasingly use their supply chain management. Because of Technology and process upgrades companies clearly show that supply chain excellence is more widely accepted as an element of overall business strategy.

Demand Planning

The sources and capacities of manufacturing have increased widely, so more companies are not focusing on plant-level production planning they are adopting more of a demand-driven focus of trying to influence and manage demand more efficiently. Rationalizing what your company is best at selling, making and delivering, and aligning the sales force with that mindset, is critical to adopting a demand-driven model. The demand driven approach can help a company create a more customer-focused mindset, without sacrificing operational efficiency. Ultimately, a demand-focused approach to planning can significantly improve demand planning and management efforts and help overall costs and customer service efforts.

Demand planning systems and proper strategies can also help uncover data and identify trends buried in a company’s information systems. Companies should conduct an enterprise-wide internal Demand Review to gather information from all aspects of the organization. Goals are then set to gain consensus on what will be sold each month for each product line or category and the resulting revenue. Of course, the driver of the Demand Review process is continuous improvement of forecast accuracy

Many companies are under pressure to develop innovative products and bring them to market more rapidly while minimizing cannibalization of existing products, which are still in high demand. In order to meet the needs of both customers and consumers, companies need more efficient product lifecycle management processes. This includes heavy emphasis on managing new product introduction, product discontinuation, design for manufacturability and leveraging across their entire product and infrastructure characteristics.

Collaboration between Stakeholders in the Extended Supply Chain

As supply chains continue to develop and mature there has been a move toward more intense collaboration between customers and suppliers. The level of collaboration goes beyond linking information systems to fully integrating business processes and organization structures across companies that comprise the full value chain. The ultimate goal of collaboration is to increase visibility throughout the value chain in an effort to make better management decisions and to ultimately decrease value chain costs. With the right tools, processes and organizational structure in place collaboration provides key people throughout the value chain with the information needed to make business-critical decisions with the best available information.

Great recent examples of collaboration have been seen in the expansion of sales and operations planning processes that include upstream and downstream value chain partners as regular participants. S&OP processes help maintain a well-coordinated and valid, current operating plan in support of customer demand, a business plan and a strategy. The improved resulting operating plan provides the management of each partner with a complete picture of forecasted demand, supply capacity, corresponding financial information with financial implications and allows them to make informed, critical decisions.

The Role of Technology in Supporting these Trends

As supply chain networks have become more complex the need for greater and improved supply chain technology solutions has become critical. Enterprise resource planning (ERP) and best-of-breed supply chain management (SCM) solution providers have made significant investments in developing solutions to address the needs of manufacturing and distribution companies in areas, such as:

  • Network and Inventory Optimization
  • Product Lifecycle Management
  • Sales and Operations Planning
  • Manufacturing Optimization
  • Logistics Optimization
  • RFID
  • Procurement
  • Business Intelligence

These technologies have enabled the supply chain information worker to innovate, drive cost reductions, improve service and meet customer expectations better than ever. In order to have sustainable improvement in supply chain performance a business must have the right balance of investments in organization, processes and technology. Lack of investment and focus in any one of these areas will reduce a company’s ability to achieve fundamental, sustainable improvement.

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