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Dergi L Executive Summaries Of June-July-August 2008 |
Let Yourself Go Over the Sides for New Markets!
Supply chain management has a strong impact on the working capital of a company. Companies are seeking best practices in how to move from working capital optimization theory to practical initiatives that will improve their corporate financial performance while maintaining customer satisfaction. Leading companies are reforming their supply chain finance and inventory management practices and adopting relevant technologies to achieve the next wave of improvements in working capital. This research preview discusses Aberdeen ideas on this topic and previews the upcoming research study on working capital optimization in the supply chain. In today’s highly competitive global marketplace the pressure on organizations to find new ways to create and deliver value to customers grows ever stronger. Gradually, in emerging economies as well as mature markets, the power of the buyer has overtaken that of the customer. The rules are different in a buyers’ market. In particular customer service becomes a key differentiator as the sophistication and demands of customers continually increase. At the same time, market maturity combined with new sources of global competition has led to over-capacity in many industries leading to an inevitable pressure on price. Price has always been a critical competitive variable in many markets and the signs are that it will become even more of an issue as the “commoditization” of markets continues. It is against this backdrop that the discipline and philosophy of logistics and supply chain management has moved to the centre stage over the last two decades. The concept of integration within the business and between businesses is not new, but the acceptance of its validity by managers is. There has been a growing recognition that it is through logistics and supply chain management that the twin goals of cost reduction and service enhancement can be achieved. Better management of the “pipeline” means that customers are served more effectively and yet the costs of providing that service are reduced. According to leaders, the supply chain processes were traditionally designed to be push-driven. The transition to becoming pull-driven or demand-driven is slowly occurring in many industries. Managing volatile demand efficiently in a demand driven environment is a significant challenge and requires companies to employ robust supply chain strategies. Often the focus tends to be on one area of the supply chain (e.g., inventory optimization) without consideration of all aspects of the supply chain, resulting in sub-optimal results. The same argument is true for all processes, i.e. that integration upstream and downstream will lead to a more responsive supply chain, an integration that is underpinned by the recognition of the need for mutual benefit which is made possible by the free flow of information up and down the chain.
The Closest Relationship Between Your Supply Chain and Consumer Networks
Supply chain management is concerned to achieve a more cost-effective satisfaction of end customer requirements through buyer-supplier process integration. This integration is typically achieved through a greater transparency of customer requirement through the sharing of information assisted by the establishment of ‘seamless’ processes that link the identification of a physical replenishment need with a ‘just-in-time’ response. The important concept here is the idea of process integration. Processes are the fundamental ways through which value is created. Such processes include: new product development, order fulfillment, supplier management and customer management. To achieve real integration in the supply chain requires ideally that these processes also be integrated - upstream with supplier and downstream with customers. Take, for example, the new product development process. If suppliers as well as customers can become part of an integrated process team (as now happens increasingly in the car industry) then it is more likely that innovative products meeting the needs of customers and consumers will be developed - and at greater profit to the members of the integrated chain. The same argument is true for all processes, i.e. that integration upstream and downstream will lead to a more responsive supply chain, an integration that is underpinned by the recognition of the need for mutual benefit which is made possible by the free flow of information up and down the chain. Globalization of products and service along with technology enhancement has resulted in increasingly dynamic markets and greater uncertainty in customer demand. Difference in customer requirements across different regions/countries may require different strategies or different product designs, brands and packaging. Supply chain management is the systemic, strategic coordination of one or more downstream and upstream flow of products, services, finances and information for the improving performance. The phenomenon of supply chain has challenged the traditional way of working with introduction of functional departments and division of work. Supply chain approach is to view the channel as a single entity, rather than as a set of fragmented elements, each performing its own function. Similar to other functions like procurement, logistics, order fulfillment, Supply chain encompasses marketing too as a key function. Primary objective of marketing function is creating avenues for exchanges, costumer focus, customer satisfaction, products and service visibility, revenue generation and maximizing profitability. On the other hand Supply chain management’s focus is coordination from suppliers to customers for maximizing product availability, delivery performance, order fulfillment, responsiveness to market demand while minimizing the total cost of the process. Conflicts arise between marketing and supply chain due to difference in perspectives and focuses regarding department deliverables. The main areas of conflicts between marketing and supply chain can be control mechanism, information and data availability, risk reduction, situation and scenario handling, failure mechanism. These conflicts are very common and widely prevalent in the industry. In the cross functional environment, if the situation is not controlled at the initial stages, it can aggravate into a fireball giving rise to chaos and loss to company.
Creating Value by Redefining How Organizations Perform Their Logistics Operations
In this article that was issued by considering that the potential of creating value by redefining how organizations perform their logistics operations is very high; it is indicated that the companies may redefine themselves as more quick, small and audacious with the logistics. In the article; it is underlined that logistics and business strategy create the chance for small ventures of competing at the same level with organizations that are much greater than them. The Supply Chain Management is increasingly being seen as a source of competitive strength. Its effective use provides potential for cost reduction and the opportunity for increasing market share. This article discusses the role of the supply chain management in achieving corporate and financial goals. It has now become an accepted fact of commercial life that customer service is a critical determinant in winning and keeping customers. Today’s customer in virtually every market is demanding ever-higher levels of performance from suppliers, particularly with respect to delivery service. In many organizations the focus upon inventory reduction has caused them to look closely at the quality of the in-bound delivery service they receive from suppliers. This article discusses the role of the logistics in achieving corporate and financial goals. It has now become an accepted fact of commercial life that customer service is a critical determinant in winning and keeping customers. Today’s customer in virtually every market is demanding ever-higher levels of performance from suppliers, particularly with respect to delivery service. In many organizations the focus upon inventory reduction has caused them to look closely at the quality of the in-bound delivery service they receive from suppliers. Logistics management is increasingly being seen as a source of competitive strength. Its effective use provides potential for cost reduction and the opportunity for increasing market share. The book discusses the role of logistics in achieving corporate and financial goals. In the particular customer service becomes a key differentiator as the sophistication and demands of customers continually increase. At the same time, market maturity combined with new sources of global competition has led to over-capacity in many industries leading to an inevitable pressure on price. Price has always been a critical competitive variable in many markets and the signs are that it will become even more of an issue as the “commoditization” of markets continues. It is against this backdrop that the discipline and philosophy of logistics and supply chain management has moved to the centre stage over the last two decades. The concept of integration within the business and between businesses is not new, but the acceptance of its validity by managers is. There has been a growing recognition that it is through logistics and supply chain management that the twin goals of cost reduction and service enhancement can be achieved. Better management of the “pipeline” means that customers are served more effectively and yet the costs of providing that service are reduced.
The Contract Management Go Through LLP
The article sets forth when and where outsourcing in planning, which appears on the foreground due to increasing importance of delegating planning responsibilities whilst a gradually increasing number of producers benefit from logistics service providers for many services today, may bear the best result. The article begins with discussing “what is supply chain planning?” and “why is it important?”, and touches Leader Logistics Provider (LLP) method, which has been applied by significant number of producers in recent years as well as 3PL and 4PL practices, and states that LLP represents a system that combines 3PL operations with the managerial responsibility of 4PL. The last section of the article, “Attainment of better is planning objectives in an outsourcing environment”, lists significant factors in fruitful delegation of high-level product flow planning to an LLP. A 4PL is an integrator that assembles the resources, capabilities and technology of its own organization and other organizations to design build and run comprehensive supply chain solutions. Expanding into the 4PL or 3PL role constitutes an interesting shift for the author, as the consultancy’s general position has been on the front end of a logistics solution: The troops typically go in to a customer location, collect information, perform due diligence and provide a white paper solution. A logistics firm usually then manages the business. Clearly the first and foremost mission of a 4PL would be to integrate the information and operations, he says. “Whether the second mission is to provide some management organizational talent or really hit on productivity and quality within the operation probably would drive who would do a better job as a 4PL, the former being a management consultancy, the latter being one of the top 3PLs that is entering the 4PL market.” The Valuation of the Crucial Critics of the 3PL / 4PL Affiliations When forming an outsourcing relationship, it is key for the organization and it’s soon-to-be provider to agree on a deal structure that is workable for both parties. Similar deal structures preferences help facilitate the relationship. Pricing; several key relationship considerations constitute a deal’s structure. First, both parties need to agree on the pricing model for the contract. Investment; in a related way some determination needs to be made about both party’s up-front and ongoing investments in the relationship. Some outsourcing engagements have few investment issues. People; will the provider offer positions to affected employees or not? There are a wealth of considerations and options for structuring the people part of the contract. Consider the fact that many companies insist the provider offer employment to all affected employees for some specified period of time. Technology; is always a major consideration when it comes to outsourcing. However, two factors have made technology even more critical. First, hardly anything gets done anymore in a corporation without a technology component. Contract Length; is another important issue. Many organizations prefer a contract length of two years, but with a short contract many advantages to outsourcing are lost. A short contract with multiple yearly renewal offers the buyer the advantage of changing.
Risk Management in the Fragile Logistics Contracts
Some logistics engagements have few investment issues. People; will the provider offer positions to affected employees or not? There are a wealth of considerations and options for structuring the people part of the contract. Experienced legal and assistance is invaluable. Consider the fact that many companies insist the provider offer employment to all affected employees for some specified period of time. Technology; is always a major consideration when it comes to logistics outsourcing. However, two factors have made technology even more critical. First, hardly anything gets done anymore in a corporation without a technology component. Contract Length; is another important issue. Many organizations prefer a contract length of two years, but with a short contract many advantages to outsourcing are lost. A short relationship with multiple yearly renewals offers the buyer the advantage of changing. This, in turn, results in fast deterioration of profit margins, because these less-competent service providers recognize price as the key (and sometimes the only) competitive advantage. Therefore, in order to keep up with the speed of harsh price discounts and quick commoditization in the outsourcing industry, a quality and value-oriented service provider firm has to continually deliver more value-adding services to its clients and increase its wallet share, through establishing an “intimate” relationship with the customer, based on trust, fair distribution of value-add, customer-specific business know-how and common values and targets. When forming an supply chain or logistics relationship, it is key for the organization and it’s soon-to-be provider to agree on a deal structure that is workable for both parties. Similar deal structure preferences help facilitate the relationship. Pricing; several key relationship considerations constitute a deal’s structure. First, both parties need to agree on the pricing model for the contract. Investment; in a related way some determination needs to be made about both party’s up-front and ongoing investments in the relationship. Some logistics engagements have few investment issues. People; will the provider offer positions to affected employees or not? There are a wealth of considerations and options for structuring the people part of the contract. Experienced legal and assistance is invaluable. Consider the fact that many companies insist the provider offer employment to all affected employees for some specified period of time. Technology; is always a major consideration when it comes to logistics outsourcing. However, two factors have made technology even more critical. First, hardly anything gets done anymore in a corporation without a technology component. Contract Length; is another important issue. Many organizations prefer a contract length of two years, but with a short contract many advantages to outsourcing are lost. A short contract with multiple yearly renewals offers the buyer the advantage of changing.
Why Do We Need Lean Supply Chain?
Horizontal integration in logistics is much more common than horizontal integration in production. It is contrasted with vertical integration. Lean logistics is central to the efficient and effective flow of incoming and outbound goods, services, and related information. As an enterprise extends its application of lean tools beyond the boundaries of its physical operations, achievement of lower total logistics cost becomes a goal and minimizing waste becomes the means. Lean supply chain is one that will have the right products in the right quantities at the right place at the right time with minimal cost, translating into customer satisfaction. In order to achieve this objective, the companies, suppliers, intermediaries, third party service providers, and customers that make up the supply chain must collaborate to make it happen. While the principles of lean have been applied in the manufacturing space for several decades now, the notion of lean supply chain management is relatively new. To help supply chain professionals gain a better understanding of how lean can be applied to their operations. A common misconception of Lean philosophy is that it only finds application in manufacturing settings. However, the impact of Lean on the logistician is significant. A goal of Lean is to eliminate waste, decrease work-in-process inventories, and, in turn, decrease process and manufacturing lead-times; ultimately increasing supply chain velocity and flow. Supply chain velocity and flow is paramount to Lean Thinking as the ultimate goal of Lean is to improve organizational effectiveness and profitability. Lean also has a vital cultural element to it that is crucial to the logistician. This is the concept of “Total Logistics Cost“. The Lean practitioner does not focus on individual cost factors such as transportation or warehousing, but rather focuses on “total logistics cost“. With inventory carrying costs representing 15-40 % of total logistics costs for many industries, making decisions based on total cost has dramatic implications for the logistician.
Book Review: Global Logistics and Supply Chain Management
Written by two highly experienced authors, this new text provides a concise, global approach to logistics and supply chain management. Featuring both a practical element, enabling the reader to ‘do’ logistics (select carriers, identify routes, structure warehouses, etc.) and a strategic element (understand the role of logistics and supply chain management in the wider business context), the book also uses a good range of international case material to illustrate key concepts and extend learning. Logistics and Supply Chain Management (SCM) are key aspects of the business world and also the not-for-profit and public sectors. While the origins of much logistics thinking and practice are in a manufacturing context, we are now witnessing increased and highly successful application of logistics and SCM principles in services contexts too. For example, the efficiencies which have been driven into banking and hospitals, where the emphasis has shifted to serving more customers, better, faster, and cheaper.Global Logistics and Supply Chain Management is essential reading for students studying supply chain management and logistics. Encompassing both practical and strategic perspectives, it also takes a truly global perspective, recognising the trans-national nature of logistics activities in today’s world. Logistics management is increasingly being seen as a source of competitive strength. Its effective use provides potential for cost reduction and the opportunity for increasing market share. The book discusses the role of logistics in achieving corporate and financial goals. Updated and expanded with more checklists, more short cases and executive summaries; “Global Logistics and Supply Chain Management” is an invaluable guide for all logistics and distribution managers. In today’s highly competitive global marketplace the pressure on organizations to find new ways to create and deliver value to customers grows ever stronger. Gradually, in emerging economies as well as mature markets, the power of the buyer has overtaken that of the customer. The rules are different in a buyers’ market. In particular customer service becomes a key differentiator as the sophistication and demands of customers continually increase. At the same time, market maturity combined with new sources of global competition has led to over-capacity in many industries leading to an inevitable pressure on price. Price has always been a critical competitive variable in many markets and the signs are that it will become even more of an issue as the “commoditization“ of markets continues. It is against this backdrop that the discipline and philosophy of logistics and supply chain management has moved to the centre stage over the last two decades. The concept of integration within the business and between businesses is not new, but the acceptance of its validity by managers is.
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