When Predictions Fail: The Continuous Supply Chain Planning Imperative

written by: suzi mezze; article published: year 2010, month 01;

In: Root » Business » Strategic planning

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Abstract:

A continuous supply chain design process can reduce risk at a time when past patterns no longer predict future outcomes reliability.

Using an advanced supply chain management capability provides manufacturers and distributors with an exceptional degree of responsiveness, visibility and agility in their supply chains so they can cope in un-predictive conditions.

Today, an organisation is skating on thin ice if it does not monitor and re-design its supply chain annually in order to adapt to the changing environment.

In order to achieve best results, many firms now rely on advanced software solutions to improve their supply chain and to support continuous supply chain design. This method enables them to constantly monitor, measure and reassess their supply chain options in order to minimise risk and maximise return.

The key drivers in making supply chain design decisions include:

  • Asset and labour costs
  • Cost of capital
  • Depreciation
  • Plant and locations
  • Inventory
  • Purchasing costs and sourcing options
  • Cost of transportation
  • Delivery times
  • Currency exchange rates
  • Trade issue

Without advanced supply chain applications, it is difficult to clearly evaluate all of the relevant factors simultaneously.

Manufacturers' critical sourcing decisions will usually include:

  1. Strategic Sourcing
    Deciding which vendors to purchase from and how much business to purchase from them.
  2. Buy Versus Make
    Deciding whether to buy raw materials and make the products or to buy the goods already made. The most economical option will be chosen.
  3. Danger of 'set and forget'
    A one-time-only supply chain design process isn't effective in today's hyper-volatile business climate therefore, the supply chain process needs to be visited and reviewed on a regular basis.

Your company does not just have a supply chain, your company is the supply chain. Your customers are only interested in the fact that you meet their needs when they want those needs met.

That is why Infor Supply Chain Management Software helps you design, build and continuously fine-tune your supply chains' top performance at all times.

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