Daily Archives: December 6, 2006

Creating a Proactive, Demand-Driven, Value-Creating Supply Chain

This was the title of one of the panels at eyefortransport‘s Supply Chain Directions Summit on November 28 and 29 in San Francisco. The panel, which consisted of David Pieper from HP, Ashley Hall from Intel and Lonny Warner from Menlo Worldwide, offered suggestions for enhancing value in your supply chains. These were some of their suggestions:

David Pieper

  • Don’t try to do everything in-house
  • Your partner data is important too
  • Event management capability is important
  • Measure your KPI’s across your supply chain
  • Don’t just push inventory and costs down the chain
  • Collaborate closely with your strategic suppliers
  • Improve your fill rates
  • Use Dynamic Replenishment
  • Adopt innovative terms and conditions in your contracts

Ashley Hall

  • Use outsourced inventory handling services
  • Use an internal ERP for tracking all of your transactions
  • Outsource manufacturing where it makes sense
  • Use a common data standard

Lonny Warner

  • Replace inventory with information
  • Consider direct-ship strategies
  • Use information to manage your overall supply chain network
  • Use smart-docks
  • Move from make-to-stock to finish-to-order strategies
  • Collaborate

In other words:

  • collaborate,
  • achieve visibility,
  • outsource,
  • reduce inventory,
  • manage your data, and
  • optimize your network.

The best supply chains are those where everyone collaborates and shares information to achieve visibility up and down the chain. This allows for event-based management and proactive alerts notifying you of a potential problem before it occurs. For example, if a product should reach the outbound port in three days and it hasn’t and you need it in twenty-one days, there may be a problem and you need to know whether it is just delayed a day or if it hasn’t even left the warehouse yet due to a production problem that shut the line down.

The best supply chains track all of their transactions and demand data and share the information that is derived to pull inventory out of the chain, not just push it down to a supplier. They also use finish-to-order strategies for flexibility and postpone orders late into the chain.

The best supply chain partners focus on their strengths and outsource their weakness to a partner that is strong in those areas. They collaboratively optimize the network to be robust and adaptive and capable of handling single points of failure. They use new technology and do as much as they can at each touch point, using smart-dock technology, for example, to minimize the number of parties and transit points requires.

Note that eyefortransport‘s sister organization, eyeforprocurement has a number of upcoming events next year custom designed for today’s procurement professionals, including the Supplier Management Forum next April in Miami. Registrations received before year’s end save $400 off of the regular registration rate and those who quote “sourcing innovation” in the discount code field save an additional $100.