A recent article in Supply Chain Digest listed the seven timeless challenges of supply chain management, as described by Dr. J. Paul Dittmann, the Director of the Office of Corporate Partnership at the University of Tennessee. While I have to agree that these challenges are “timeless” in that we (needlessly) see them again and again and again, I don’t understand why … since all of them are solveable with today’s technology. More specifically:
- Too Much Product Complexity
Most companies have too many SKUs, and, to be precise, too many underperforming SKUs. But a good “spend analysis” with a modern data analysis package, which includes profit and loss data, can easily identify these SKUs which can be phased out and eliminated when contracts end.
- Too Much Slow-Moving and Obsolete Inventory
While good forecasting and demand planning can never eliminate obsolete inventory, a regular “profit” analysis that factors in the carrying cost to date and current price point makes it easy to identify when it costs more to hold on to inventory than to get rid of it at a discount, making it an easy decision from a loss-prevention perspective.
- Supply Chain Considerations Not Part of the Product Design Process
Simply do a total cost of ownership in the design phase and your critical supply chain considerations come into play right away.
- No Supply Chain Strategy
This is an easy fix. Sit down and define one.
- Ineffective Matching of Supply with Demand
With a slew of (near) real time supply chain visibility solutions on the market, all you have to do is implement one.
- Physical Network Problems
There are a number of strategic sourcing decision optimization platforms on the market that can perform detailed network analysis at very reasonable price points. Get one, and if necessary, get the consulting help to do it right. A few hundred K on a network optimization project can easily save you a few million.
- Global Issues and Outsourcing Problems
With a number of expert niche consultancies and deal architects that are very affordable, this problem is easily solved as well.