- 19 Tested Areas to Seek Supply Chain Best Practices
- These supply chain best practices are shown in list below:
- GLOBAL LOGISTICS / SUPPLY CHAIN BEST PRACTICES - To Support and Drive Business Success and Trends
- 19 Tested Areas to Seek Supply Chain Best Practices
Since the global financial collapse in , most chief executives have focused on cost reductions, which they expect will translate to reduced prices. Put contracts under the supply chain function.
19 Tested Areas to Seek Supply Chain Best Practices
Purchasing and procurement teams often negotiate significant potential savings during the sourcing process but never fully realize those savings. The reasons for this vary, but they often include a failure to communicate contract terms to the affected organizations and a failure to monitor contract compliance.
All too often, in fact, the executed contract is filed away in some drawer and forgotten. This is no exaggeration; several years ago, the research firm Aberdeen Group asked supply managers the following question in a survey: Twothirds of the respondents stated, "We can't even find the contracts, much less manage them. More companies are moving responsibility for contract management to the supply chain organization rather than leaving it in purchasing, legal, finance, or operations. One benefit of this shift is that it ensures the contracts are collected and maintained in a central repository.
The migration of the contract management function to the supply chain organization also allows the supply chain leader to more effectively leverage the company's spend, particularly in the area of services, where there is a great opportunity for cost reduction and risk mitigation. The global economic downturn means that more chief financial officers have put inventory on their radar screens, and their financial teams are constantly looking for new ways to improve the bottom line and reduce working capital.
These supply chain best practices are shown in list below:
Supply chain organizations should therefore constantly review their inventory quantities and strive to keep them at an optimal level. It's no surprise that best-in-class companies are paying attention to inventory at the highest levels. The "real" cost of holding inventory often is higher than the generally assumed 20 to 25 percent. In fact, recent research reveals that inventory holding costs could represent up to 60 percent of the cost of an item that is held in inventory for 12 months. Those findings included the holding cost of insurance, taxes, obsolescence, and warehousing.
Poor planning and forecasting are direct causes of inventories that are out of balance with a business's needs. Accordingly, best-in-class companies also are placing more emphasis on demand planning and forecasting as an additional means of ensuring optimal inventory levels. Establish appropriate levels of control and minimize risk.
Supply chain management policies and procedures should follow an appropriate sequence and structure, and it is important to review them frequently if not constantly and bring them up to date. Keeping them realistic and easy to understand and follow will help to ensure compliance. It is certainly possible to go too far in establishing policies and procedures, however. That is why bestin- class companies periodically review their policies and controls to ensure that they are not creating bottlenecks.
Their objective is to streamline them without sacrificing the ability of those controls to deter theft, fraud, and other problems. Risk mitigation goes hand-in-hand with policies and controls, and best-in-class supply chain organizations integrate risk-mitigation methodologies into their sourcing decision process.
This is a complicated subject that we can touch on only briefly here, but in short, these organizations are adopting sound methodologies that include: Take "green" initiatives and social responsibility seriously. Reducing a supply chain's carbon footprint is no longer a "nice but not necessary" practice. It's likely that a carbon- trading regime will be established in the United States at some point. But here's another reason why best-in-class companies "go green": We're also seeing more and more requests for proposal RFPs that ask suppliers and service providers to provide information about their green initiatives.
Buyers and consumers are also considering social responsibility when making purchases. Social responsibility consists of a framework of measurable corporate policies and procedures that result in behavior designed to benefit the workplace, the individual, the organization, and the community. Social responsibility is playing an increasingly significant role in best-inclass supply management organizations' decisions, not just when it comes to purchasing but also in regard to risk evaluation.
Roadmap for relevance The 10 best practices described above do not represent a complete list of every action that top-tier supply chain management leaders are engaging in now. This list does, however, provide some ideas and perhaps a roadmap for a supply chain organization that is striving to be viewed as valued and relevant to its parent company. Even if you already have implemented many of these practices, the insights and examples offered here will serve to validate your current strategy. And if you aren't taking all of these steps, then adding the remaining ones to your lineup will help you complete your transformation to a best-in-class supply chain organization.
After you comment, click Post. If you're not already logged in, you will be asked to log in or register. We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an e-mail to? Correspondence may be edited for clarity or for length. Want more articles like this? Establish an appropriate and thoughtfully staffed supply chain structure.
- The Victory Gardens of Brooklyn (Library of Modern Jewish Literature): A Novel.
- 10 best practices you should be doing now – Procurement – CSCMP's Supply Chain Quarterly;
- A Rogues Redemption (Rogues Desire Book 2)?
- Join the Discussion.
Ideally, your supply chain will be staffed and structured in a way that maximizes effectiveness as well as efficiency in order to bring the most benefit to your organization. Most organizations these days find that a centralized strategy, implemented by specialized managers in their various business units is the most optimal approach. Reportedly, this combination leads to more harmony between strategy and implementation, while also resulting in the best service.
In staffing your supply chain , you should be more focused on strategy than simply transactional ability with your top leadership.
GLOBAL LOGISTICS / SUPPLY CHAIN BEST PRACTICES - To Support and Drive Business Success and Trends
These leaders should extend this strategic thinking toward creating value using strong interpersonal skills such as communication and relationship management internally as well as externally. Identify areas where technology can help improve and streamline processes. Approximately 79 percent of supply chain enterprises surveyed worldwide fault manually driven processes as the cause for continued lack of supply chain visibility. Lack of visibility and another global concern, the uncoordinated nature of supply chain processes can be solved with the automation provided by technology: Overall, only 6 percent of companies report that they have highly automated end-to-end and cross-functional processes.
Instead, review processes that are producing below standard to determine areas where technology can help improve, and then select your software solutions to fit those needs.
- Spherical Tomi!
- 5 Best Practices for Supply Chain Management Strategies!
- The Enchanted Wolf;
- Tales of Greed & Wishful Thinking.
- Posts categorized as 'Best practices'.
With appropriate technology in place, detailed reporting data will be more accessible and accurate to better inform the supply chain council for performance measures as well as strategic planning. Maintain healthy supplier relationships. An important indicator of success in this industry is the health of your supplier relationships.
19 Tested Areas to Seek Supply Chain Best Practices
These connections should be maintained and cultivated on an ongoing basis, beyond the finalization of your deal. The best supplier relationships are the ones with two-way communication between the buyer and seller. Your objectives should include mechanism s to maintain the health of your relationship, goals for continuing improvement and value, performance measurement and a platform for conflict resolution.
- The essential guide to supply chain management best practices;
- Soziale Gruppenarbeit: Die Rolle der Gruppenleitung / Gruppenbegleitung (German Edition).
- La Mandragola (Italian Edition);
In procurement, look at total cost of ownership over price. Follow the example of best-in-class companies, and move away from the procurement practice of selecting a supplier based completely on price. The end of SQL Server extended support should spur database teams into action. Consider these four options to extend The cloud isn't immune to system failures.
You can increase database uptime and prevent data losses with these high availability WCM used to mean platforms for webpages viewed on desktops. Today, it's morphing into digital experiences, and it taps AI as well You can search text, but it's harder to catalog images and video. New tools are automating those processes at the enterprise Box wants to be the hub of its enterprise users' software and AI content ecosystems with integrations and partnerships ranging A new ADP mobile app feature is delivering workforce analytics into the hands of both HR and other business leaders, in turn, Virtual reality may be on the cusp of mainstream adoption for HR.
It provides an engaging learning experience for employees, Cornerstones of an omnichannel strategy It's almost certainly true that your company needs omnichannel capabilities. How to use MRP to reduce inventory levels After a materials resource planning system implementation, companies may unexpectedly find themselves with higher inventory levels. How to create internal supply chain alignment An efficient and integrated supply chain starts inside the company.
Secrets of a successful IoT-enabled supply chain The use of IoT technology is a major trend in supply chain management. Important advice on crafting a supply chain visibility strategy Supply chain visibility provides a number of benefits, including helping you predict and deal with disruptions, but getting it is not easy.
Seven essentials to help you create an effective traceability program Supply chain traceability gives you the power to pinpoint problem sourcing and enables sustainability efforts, and those are just two benefits. How to create supply chain sustainability Sustainability is critical to your brand image, compliance and other markers of success.
How to choose the best supply chain analytics If you're researching supply chain analytics systems, you likely have plenty of questions. How you should approach IoT and analytics Here's a look at why IoT and analytics can enable better supply chain visibility, and advice on how to think about these technologies strategically. How supply chain partners can create IoT success -- together Instead of taking a lone-wolf, piecemeal approach to IoT adoption, supply chain partners can instead work together in a coordinated fashion to improve the supply chain more efficiently.
Why supply chain partners should share data Supply chain partners are more likely to achieve success together if they use analytics in an orchestrated way. How to think about dual sourcing Dual sourcing can be a helpful way of dealing with supply chain complexity and potential disruptions -- but don't make the mistake of thinking it only has benefits. Seven factors to consider in your supply chain risk strategy Today's supply chains are highly complex, which makes doing a risk assessment even more difficult.
Login Forgot your password? Submit your e-mail address below. We'll send you an email containing your password. Your password has been sent to: Please create a username to comment. Search Oracle Breaking down AI-infused Oracle Autonomous Cloud services Oracle offers AI-infused cloud services for analytics, application development, application and data integration, data management Oracle Autonomous Database Cloud gets transaction processing Oracle launched a transaction processing version of Autonomous Database, a cloud-based platform that automates configuration and Search Data Management Containers key for Hortonworks alliance on big data hybrid Hortonworks is joining with Red Hat and IBM to work together on a hybrid big data architecture format that will run using Big data tooling rolls with the changing seas of analytics Hadoop data tooling is expanding.
Graph processing gives credit analysis firms an edge A graph database startup's parallel loading, processing and querying combine to deliver real-time data for fintech firms that Search CRM Adobe acquisition of Marketo could shake up industry Adobe looking to acquire Marketo could also be a ploy to incite a bidding war for Marketo from its holding company, Vista Equity,