Supply Chain Cost-Cutting Strategies
May 23rd, 2007 at 07:02am David Bush - Iasta
Browsing through the Aberdeen site recently, their recent report on Supply Chain Cost-Cutting Strategies: How Top Process Industry Performers Take Radically Different Actions caught my eye. As someone who has spent the last seven years trying to help companies lower costs and increase returns, I was interested in finding out what strategies are working for process industry companies.
According to the report, companies should evaluate their operations and supporting technology to ensure they effectively accomplish the following:
- centralize key elements of the supply chain management organization
- work toward end-to-end data and process visibility throughout the supply chain to improve utilization of manufacturing capacity and distribution efficiencies
- move to more frequent inventory policy review (multiple times a year) and improve ability to sense changes in customer demand (aim for five days or less)
- upgrade supply chain applications, deploy supply chain optimization, and move to a closed-loop planning and execution technology framework, and
- view supply chain management as a competitive differentiator.
The report also identifies the top supply chain transformation goals for process industry companies:
- data and process visibility
- cross-functional metrics
- closed-loop integration of supply chain planning & execution
- centralized supply chain management organization
Good advice, and good advice, but I was a little disappointed that they did not point out the importance of good eSourcing and eProcurement tools as part of your end-to-end supply chain technology solution as these platforms lead to better centralization in supply management as well as improved data visibility and metrics.
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Entry Filed under: Analysts/Research, General, Spend Analysis
1 Comment Add your own
1. Robert M. (Mike) Kanze, MBA, C.P.M., A.P.P. | May 25th, 2007 at 1:24 pm
While e-tools can “lead to better centralization in supply management as well as improved data visibility and metrics,” this is still a “sometimes” proposition.
Unfortunately we are still in the age when many half-baked or otherwise ineffective e-tools are widespread. Even more to the point, there is an appalling lack of comprehension that an organization must have reasonably robust manual processes policies firmly in place before undertaking any “e-tooling” efforts. Absent this robustness, all an organization often accomplishes is simply automating bad or ineffective practices.
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