According to a recent supply chain survey conducted by Capgemini Consulting, demand volatility was the top business driver for supply chain managers (40% of survey respondents ranked it as number one). This is because although the economy seems to be improving, market demand is still uncertain, making it more difficult to operate a reliable supply chain. In order to counter this challenge, survey respondents are determined to improve the visibility of their supply chains (this ranked as top initiative for 45%).
Supply chain visibility is something that can be easily achieved by implementing an enterprise-wide automated technology solution. A software solution such as Management Dynamics’ allows users precisely monitor the inbound and outbound movement of goods at the shipment, order and SKU level, using over 350 reference points. This level of visibility enables suppliers, manufacturers, retailers and transportation companies to improve customer service and minimize expediting costs by managing inventory in-transit. So no matter how volatile the market is, companies can have complete visibility and control of their inventory levels.
To learn more about how a software solution can improve supply chain visibility, please check out Supply Chain Visibility Excellence: Fostering Security, Resiliency and Efficiency. This new report from Aberdeen Group focuses on gaining visibility into critical elements across the end-to-end logistics network for improving cost and service. Additionally, it takes a look at how Best-in-Class companies are streamlining their supply chains.
Key findings include:
Best-in-Class companies experienced a 3% decrease in supply chain execution cost as a percent of revenue (inbound /outbound transportation, pipeline and staged inventory and SC management costs)
Best-in-Class companies experienced a 3% decrease in total landed costs per unit handled
Best-in-Class companies are between 19% and 42% more likely to respond to non-catastrophic supply chain disruptions within hours.
According to a recent survey done by Tompkins Supply Chain Consortium, companies are now more likely to have executive-level supply chain leaders. Nearly half of the retail and manufacturing companies who responded have a supply chain leader at the executive vice president level or above (the chart below shows a breakdown by industry.)
The executive director of the Consortium explains this increase in an SDCExec article:
“With supply chains becoming more dynamic and agile, organizations need to able to keep up with the pace,” says Bruce Tompkins, executive director of the consortium and author of the briefing. “And these companies are beginning to realize the significance of having a high-level supply chain executive influence their business strategies.”
Companies seem to be realizing that the supply chain can be a fundamental value driver in an organization, but in order for this to happen, procedures need to be in place across the board to ensure the entire supply chain runs as smoothly as possible. By having a voice high up in the executive level of a company, supply chain teams can ensure that supply chain management tactics are taken into consideration when operational decisions are made.
Although this is progress, some companies still have improvements to make when it comes to collaborating: about a quarter of the respondents said they have no formal process for aligning supply chain goals. If a company is large and has several different business units, it can be a problem if these units don’t communicate with one another. Even if each unit has its own supply chain, it will benefit everyone to share ideas and best practices.
The Business Performance Management (BPM) Forum and the Chief Marketing Officer (CMO) Council recently did a survey on approximately 400 executives, many from companies worth more than $1B. They determined that while most organizations understand that supply chain collaboration should be a top priority, most have yet to achieve it.
“According to the survey results, the problem is pretty widespread. About 50 percent of the respondents said they were focusing on collaboration “at some level,” but that only 5 percent were actually doing it end-to-end. In addition, 75 percent said they have “no ability” or “an unsatisfactory ability” to extend and leverage their internal systems to suppliers and outsourced service providers. And 26 percent of respondents say they share customer data and insights with partners to enable innovation.”
The key to a synchronized supply chain is to extend processes to all trading partners to work off of one set of documents and eliminating errors due to losing a document or re-keying information into a secondary system. If an organization is not well-connected to their suppliers, forwarders, and Customs brokers, then this synchronized supply chain is not easy to achieve. Using automated solutions such as Supplier PO Management and Supplier Solicitation Portals from Management Dynamics new Trade Portals product line, can help you collaborate with your trading partners to ensure you don’t fall into that 75%.
PricewaterhouseCoopers and the Supply Chain Management Institute recently did a study, Transportation & Logistics 2030, which looks at how supply chains will evolve over the next 20-plus years. The first volume of the study, the only one that has been release so far, is an analysis of the ramifications of energy scarcity and its impact on the design of future supply chains.
Here are a few key findings:
Oil prices will increase and so will the use of alternative fuels, however neither are likely to revolutionise T&L – but the need to track, document and allocate costs for emissions just may.
Patterns of individual mobility vary in different regions; however concerns about cost and carbon footprints will spur individuals to reduce holiday and business travel and consume more locally produced goods.
Supply chain design, including the location of production sites, will need to take energy and emission costs related to logistics processes into account. There will be no reverse of globalisation, but many supply networks will be established at a regional level.
Volume 1: How will supply chains evolve in an energy-constrained, low-carbon world?, along with further details and methodology for the study, is available for download here on PricewaterhouseCoopers website.
A recent survey conducted by GTM Research on 74 supply chain executives had some surprising results. Interestingly, sustainability is not at the top of the list of priorities – it falls in the middle of the pack. Companies are still investing in this area though, and the quest for energy efficiency is more popular than any other sustainable supply chain activity this year. Three fourths of respondants feel that their company’s environmental stance will have a direct effect on customer relationships within three years. Approximately one third feel it is a issue with customers today.
The below chart from GTM Research shows what their respondants believe will be the most influential supply chain activities in the next 12 months, for industry leaders and laggards:
Source: GTM Research
To read more on the study findings, please read the press release from GTM Research. SupplyChainBrain also has a nice summary of the findings on their website.
According to the 14th Annual Third-Party Logistics Study, which was conducted by Capgemini Consulting, both shippers and 3PLs are reporting that their current IT provider is not giving them the tools they need to measure performance:
Nearly nine in ten shippers (88 percent) said that IT-based logistics services are important, but only 42 percent said they are satisfied with the capabilities of their provider. As a result of this IT capability gap, the study authors said, shipper respondents reported a lack of the key performance indicators, alerts and visibility required for an adaptive supply chain, and 3PLs reported similar difficulties in getting the data and commitment they need from shippers.
Global supply chains are complex, inter-connected systems that must be managed by establishing key performance indicators, measuring the process, analyzing results and developing strategies to continuously improve performance. Unfortunately many supply chain teams struggle to access data in multiple sources and formats and do not have access to the latest business intelligence tools.
Management Dynamics has a Performance Management solution that integrates with our Global Trade Management (GTM) solutions to access the wealth of operational data that is available in supply chain visibility and across key export, import and trade agreement processes which span from order to final delivery. Users across various functions can access Performance Management to run Web-reports or manage key metrics through scorecards.
Each department can then access their performance monitoring reports to manage service providers such as suppliers, forwarders, and brokers as well as manage critical process cycle times. By sharing operational data and inter-linking metrics across compliance, logistics and procurement domains, supply chain managers can make better data-driven decisions and manage cash-cash cycles.
Best-in-class companies have been able to realize the following benefits after implementing Performance Management:
Shift from tactical decision making to continuous improvement programs based on Lean principles
Restructure supply chain and proactively manage business partner SLAs
Access one aggregated source of cleansed data with all key dimensions
According to a recent supply chain study, visibility and environmental responsibility are the two areas that could use the most improvement. A write-up of the results in Supply & Demand in Executive reports that two-thirds of supply chain and operations professionals have marginal or no visibility across all tiers and levels of their value chain. Please read the full story here.
Concerned that you fall into this group? Try using a software solution to optimize your supply chain visibility.
Even though most corporations have implemented cost-cutting measures in recent months, one trend remains prevalent. MFGWatch conducted a survey on more than 200 purchasing professionals and engineers in the manufacturing industry, and 69% said that in the past year they had maintained or grown sourcing. Here’s Logistics Today’s analysis of the survey results: 2008 Sourcing Needs Stayed Steady, 2009 Big Moves are on Hold
In order to reap the cost-saving benefits of sourcing from all over the world, it is important to have an efficiently managed supply chain. Using a software solution such as Management Dynamics can ensure that you are communicating efficiently with all of your trading partners.
According to Aberdeen Group’s new report – Inventory Management: 3 Keys to Freeing Working Capital - the top action companies have taken in response to the recession is inventory reduction. In the report, 91% of 137 executives surveyed indicated that they are re-evaluating inventory management, and 61% said that they are looking at inventory technology enhancements. The report gives three “steps to success” that companies can take to manage their inventory more efficiently: 1) Segment finished goods inventory based on financial performance. 2) Move away from “rule of thumb” inventory target settings. 3) Integrate inventory target settings into S&OP meetings.
Aberdeen is offering a free copy of the report to those who register here before July 31. After that date, the report will be available for purchase here on Aberdeen.com.
Recently, SupplyChainBrain.com reported on the results of a survey of executives from 140 companies in the U.S., Germany and Japan, done by Microsoft and Infosys. Some key findings of the survey are below:
Half reported greater supply chain complexities, yet a lack of visibility
A number of respondents claimed that it could take hours before a supply chain disruption was even reported
More than half reported a higher number of products, stock-keeping units, suppliers, production locations, demand channels and geographies for their sale of products
Despite current economic conditions, 40% of respondents said that they expect their supply chains to become even more complex by 2010
“The economy may be down, but the number of products, suppliers and geographies that high-tech manufacturers have to manage has gone way up,” said Tyler Bryson, general manager of U.S. manufacturing and resources with Microsoft. “This complexity has made it difficult for firms to discover disruptions and act quickly, and this is becoming an increasingly serious industry issue.”
Employing a software solution such as Management Dynamics can help combat these issues. The article states that a large portion of respondants spent 25% of their time searching for and reworking supply chain data, to achieve the desired format and level of detail. A software solution could simplify that process significantly, saving a lot of time and reducing the number of errors.
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