Daily Archives: July 19, 2009

The Supply Chain Opportunity in a Challenging Economy

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Spending less money seems to be a logical step when times are tough, but it can be a short-sighted approach. Companies must not just make fewer, smaller investments, but make smarter investments. Just because the economy has slowed down, it doesn’t mean you have to.

I couldn’t have said it better myself. This quote, from a recent article in i2’s Supply Chain Leader about “The Supply Chain Opportunity in a Challenging Economy”, gets to the heart of the matter … if you’re not investing smartly, you’re slowing down with the economy. And if you slow down, you risk becoming the next bankruptcy.

But getting back to the article, the next point it makes is that in this tough economy, a sharp focus on supply chain management is critical to your company’s success. Definitely. Remember Business 101: Profit = Revenue – Cost. Smart supply chain management lowers cost WHILE increasing value, which can increase revenue, which maximizes profit. It’s really that simple.

Now is the ideal time … for technology that provides a quick return on investment and long-term savings. Technology implementations that streamline manufacturing operations, optimize inventory, and focus on increasing cash through improved asset utilization and enhanced transportation management can enable your business to maneuver through volatile times, setting you up for success once the economy recovers. That’s why this blog has a large technology focus. Technology will help you optimize your supply chain, which saves you money and, done right, optimizes your cash flow.

And don’t forget to maximize the investments you’ve already made in your supply chain. This will help ensure that you are in a position to not only weather the storm, but to move past the competition once the storm clears. If you have systems that have been working well for you, even though it might seem a bit costly (at first), maintain the maintenance, acquire supplementary modules or systems that maximize your return, and hire consultants to help you figure out how to get more out of what you have. Remember, it’s all about ROI.

Then stay the course. A focus on innovation will lead to success … especially when so many companies have essentially curled up in the fetal position to wait out the storm. Recessions aren’t just when the losers are culled … they’re when the winners are made. And if you’re reading this blog, I am assuming you’re a winner … so go get ’em tiger!