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Part - XIII

Supply Chain In The Dynamic, Competitive World

Customers today have exceedingly high expectations. And one thing that’s essential to keeping them happy is to maintain flawless, well-coordinated, execution at all points up and down the supply chain. That means that one must be able to reach out, and collaborate with a network of business partners to make sure that the right product is in exactly the right place at precisely the right time. To make this happen, one must be ready and able to work with those partners to adapt quickly to constantly changing conditions - everything from shifts in demand to equipment breakdowns to revised customer orders. And, of course, one has to keep a sharp eye on the bottom line - which means that one must increase efficiency, maximize equipment usage; and reduce stock levels even as you maintain ever higher levels of service.

While much of the focus over recent years has been on evolutionary change, leading-edge companies have been pursuing revolutionary transformations. Four strategic imperatives driving the revolutionary changes taking place in supply chain management are summarized below: -

Speed

Today’s marketplace is about speed - speed to market, speed through the supply chain. The speed customers, the ‘now generation’ with a click mentality, expect their needs to be fulfilled immediately. The Internet is both the solution to and the cause of this increased speed. Companies will need to arm themselves with the tools and technologies needed to operate at warp speed.

The speed of change is unprecedented. In the late 70s when IBM released the 4300 computer, delivery dates were as long as a year after ordering. Today, during the same time, a PC could go through five or six evolutions. Companies are managing larger product portfolios, and they are being forced to dramatically compress the time from idea to market. We see significant growth in new technologies that help facilitate new product introduction.

In addition to the speed of change, products are moving faster through the supply chain. Several years ago it was common for inventory to sit for months. Today, leading-edge companies manage inventory in motion, striving to never see it sit idle. Real-time planning was once considered an oxymoron. Now, it is critical that sophisticated planning techniques (such as optimized available to promise, dynamic sourcing, or reroute in-transit) be brought into the transaction process.

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* Contributed by -
Amit Mishra,
PGP 19188,
Indian Institute Of Management, Lucknow.