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Supply Chain Management in 2013 – What to expect…  
 

Since the start of the new millennium a shift towards a more streamlined, efficient and strategic supply chain management system has taken place in most international companies. It is common knowledge these days that supply chain is no longer the business unit with the smallest budget allocated or the business unit that plays second fiddle to marketing, finance or human resources. A company’s supply chain division can now be linked to the overall business strategy to create the following benefits: optimize all business operations; create operational excellence in various divisions; improve efficiency; reduce costs and increase profits. Taking into consideration the value that efficient supply chain management can add to an organisation, what does the year 2013 has in store for the supply chain industry?  The emphasis of supply chain sourcing strategies will change from low-cost country sourcing strategies to a strategy with focus on value creation, total cost of ownership and risk assessment & management. According to Mary Siegfried, a senior writer for the Inside Supply Management Journal, companies are recognizing the hidden costs involved in sourcing globally. Sourcing internationally where labour is cheap is no longer the only method to save costs.  Companies, together with their supply chain specialists, are developing new sourcing strategies known as best sourcing in order to save costs and optimize operations. Best sourcing initiatives are based on the following key principles:

 

  • * organisations should ensure that they adapt well to unexpected changes – they should be flexible and dynamic;
  • * supply chain management should be a core function;
  • * shift focus to value add rather than low costs;
  • * best sourcing is rooted in TCO, cost analysis and risk management;
  • * best sourcing is a continuous process that will grow and change on a daily basis.

 

Thomas L. Tanel, the CEO of an international supply chain & logistics optimization company, underlines the importance of understanding your supply chain and planning for unexpected changes:  "Supply management professionals must understand the costs and impacts of risk in their supply chain. It involves sitting down and going through scenarios by questioning, 'If X happens, what do we do and how can we handle it?"

 

Because of the ever-changing and sometimes unstable working environment, companies find themselves in, it is of critical importance that they get the right skills on board to manage their supply chain processes and changes. This explains the increased demand in supply chain professionals that can conduct data analysis, business and continuous improvement, implementation of best practice methodologies and effective change management. This has also resulted in consulting companies like Accenture, Barloworld, PWC and Deloitte’s securing major contracts with international clients, where they optimize and improve supply chain, planning, procurement and sourcing strategies.  This amounts to major savings for their clients, which directly increases profits.

 

There is no doubt that now more than ever, supply chain is the industry to be in. It’s becoming more and more specialized and the demand for qualified supply chain professionals is increasing on a monthly basis. Don’t get left behind – join the supply chain movement for a career filled with challenges, growth and success!

 

Greeff Moolman
 
     
 
 
Logistics Strategy-Gaining visibility and Future trends  
 

When a company creates a logistics strategy it is defining the service levels at which its logistics organization is at its most cost effective.

 

What Is Involved in Developing a Logistic Strategy?
According to (http://logistics.about.com/od/supplychainintroduction/a/strategy.htm) a company can start to develop a logistics strategy by looking at four distinct levels of their logistics organization.

  • Strategic: By examining the company’s objectives and strategic supply chain decisions, the logistics strategy should review how the logistics organization contributes to those high-level objectives.
  • Structural: The logistics strategy should examine the structural issues of the logistics organization, such as the optimum number of warehouses and distribution centers or what products should be produced at a specific manufacturing plant.
  • Functional: Any strategy should review how each separate function in the logistics organization is to achieve functional excellence.
  • Implementation: The key to developing a successful logistics strategy is how it is to be implemented across the organization. The plan for implementation will include development or configuration of an information system, introduction of new policies and procedures and the development of a change management plan.

A successfully implemented logistics strategy is important for companies who are dedicated to keeping service levels at the highest levels possible despite changes that occur in the supply chain.

 

Supply Chain Visibility

Supply Chain Visibility is knowing where inventory is at any moment. But it is also actionable information that can help support customers and be applied to myriad touch points along the supply chain—from supplier to service provider to end customer—to remove redundancies and improve processes. (http://www.inboundlogistics.com/cms/article/how-to-gain-supply-chain-visibility/)

 

Because businesses often focus on capitalizing core growth initiatives, many do not have the internal IT infrastructure to support dynamic supply chains. Collecting and identifying data that is important, validating this information, and communicating it in a way that lets others leverage this visibility remains a critical challenge for companies large and small.

 

6 STEPS TO SUPPLY CHAIN Enlightenment or Visibility

STEP 1. Open lines of communication among all parties involved. Visibility means different things to different companies. So you have to define what your enterprise is looking for, as well as what visibility, and how much, is important to the customer.
Is it visibility into freight capacity? Is it mode-specific, domestic, or international? Is it exception-based or 24/7/365?

 

STEP 2 Trust your partners. Visibility is built on sharing information and trusting service providers with that information. Identify the role a 3PL, forwarder, or carrier will play, and trust it knows what itπs doing. If you have built a relationship, established benchmarks, and aligned expectations, everyone knows what they are accountable for. Misaligned goals, or a failure to trust supply chain partners with vital data, planning, and execution, will ultimately leave all parties disappointed.

 

STEP 3 Invest in technology. The only way to drive better visibility is to invest in the technology infrastructure and resources to gather and act on necessary information. End users can either partner with a service provider that has the technology and resources to execute, or find a stable of partners—and build relationships with each one—to ensure expectations are paired.
(http://www.inboundlogistics.com/cms/article/how-to-gain-supply-chain-visibility/)

 

Future Trends with Manufacturers and Brand Owners
The move towards focusing on core competence and using ICT developments to manage and coordinate the supply chain is an ongoing process that is opening the door of opportunity to a range of supply chain partners. The main future trends that are discernible are as follows:

 

* Manufacturers and brand owners are focussing ever more on core competences and building external support networks of service providers to take responsibility for ever increasing chunks of the supply chain.

 

* There is a simultaneous drive cut costs while maintaining quality and meeting customer demand.

 

* Increased speed of flow of inventory, fewer and lower inventory buffers and reduced absolute levels of inventory in the supply chain (notwithstanding strategic stocks to mitigate supply chain risks).

 

* Increased and deeper application of the principles of lean production out into the wider supply chain to cut cost and waste and improve flow

 

* Increased use of ICTs (Information and Communications Technologies) to improve visibility and responsiveness up and down the supply chain.
(http://www.albalogistics.com/2010/03/3pl/ )

 

Sources:
http://www.inboundlogistics.com/cms/article/how-to-gain-supply-chain-visibility/
http://www.albalogistics.com/2010/03/3pl/
http://logistics.about.com/od/supplychainintroduction/a/strategy.htm
 
     
 
 
Supply Chain – Planning can make or break your Business – October 2012  
 

Remember the saying, failing to plan, is planning to fail? How many times do business have this challenge. Often.

According to Epiq, for many companies, putting together a supply chain can be an easy part of supply chain management. The real difficult parts often seem to come from adequate supply chain planning. The difficulties that often arise as a result of poor planning can be extremely problematic for a business. The following sections will explain some of these problems and will seek to address their root causes. Read the full article here. (Source: EPIQ - Articles : Supply Chain -  Supply Chain Planning Systems- http://www.epiqtech.com/supply_chain-Planning-Systems.htm)

  1. A deep understanding of the meaning of supply chain planning is needed. DEFINITION. (SCP) is the component of supply chain management involved with predicting future requirements to balance supply and demand.(Source:
http://searchmanufacturingerp.techtarget.com/definition/supply-chain-planning-SCP)
Forecasting, demand planning, procurement all play a vital role. SCM is sometimes broken down into the stages of planning, execution and shipping.
  2. Know how to plan. Supply chain planning and supply chain execution (SCE) is the two main categories of SCM software.  The difficulties that often arise as a result of poor planning can be extremely problematic for a business.  Businesses need to understand exactly what the term supply chain planning mean
  3. Know what customers want. Make a forecast that reflects customer reality, not the hopeful expectations of marketing and sales team
  4. Use technology. Information technology advancements such as payment processing, procurement of direct supplies and customer order entry have helped significantly reduce the length of the cash-to-cash cycle for many of these businesses.

Overall, supply chain planning is a critical component of any business's supply chain management.  Without accurate planning abilities, businesses end up cutting into their revenue unnecessarily.

Possibly putting vendors and distributors into difficult situations that may strain the supply chain relationships in the long run. Only by communicating with customers directly and in real-time can businesses have a solid, reliable foundation on which to base their supply chain planning forecasts.

After all, failing to plan is planning to fail.