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Part - XV

Stakeholders’ Value

The modern supply chain requires a shift in thinking from a volume-based perspective to a valuebased perspective. Moving forward, supply chain effectiveness will be measured on how well it adds value to customers, trading partners, and shareholders. This shift in focus will require a cross-functional and cross-organizational understanding of all supply chain dynamics so a balance can be reached between all constituencies. Companies will move away from departmentally oriented metrics (fill rate, asset utilization, periods of supply, and the like) to supply chain wide metrics (such as total cycle time, total customer satisfaction, and return on all assets).

The growth in technologies like advanced planning and scheduling and collaborative planning is driven by these value improvement objectives. It isn’t often a new technology like the Internet comes along and presents such a wonderful opportunity to revolutionize the way the companies do business. Innovative companies will leverage the power of the Internet and the strategic imperatives mentioned above to gain competitive advantage and to redefine supply chain excellence.

The challenge of the new economy

Today, supply chains are becoming a key competitive weapon, and that means that they face a mounting array of challenges. They must move with ever-increasing speed; supply customized, individually configured products; promise and deliver with precision and adapt quickly to shifts in demand, customer tastes, and economic conditions. To succeed, the companies have to find answers to some fundamental supply chain questions: -

• How can we respond to changes in demand without carrying lots of inventory?

• How can we maintain service while squeezing more out of inventory, fixed capital, and transportation assets?

• How can we bring new products to market more quickly and support high demand?

• How can we shift to Internet-based selling and go direct to the end consumer when our supply chain is focused on full, truck load systems?

• How can we meet demand if our preferred supplier can’t deliver?

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