Over my 30-year career as a supply chain business process consultant, I've had the pleasure of working with some of the largest corporations in the world - so imagine my surprise when many of these companies told me that they were continuing to have problems with their supply chain.
Even more surprising was that most of their problems stemmed from a lack of visibility and the inability to predict the performance of their supply chain partners. It's surprising because for the past 25 years, supply chain visibility has been the topic of conversation in many business articles, supply chain organisations, and analyst reports.
Manufacturers, retailers, distributors, and third-party logistics organisations focus on their ability to track the location of an order or shipment. While in-transit tracking is important for the obvious reasons, it is only the tip of the iceberg when it comes to supply chain visibility. Contained in these supply chain messages are a wealth of information that, used properly, can help a company reduce operational costs, increase revenues, and improve customer service.
Order to Cash and Procurement to Payment are key examples of processes that can leverage transactional data to drive economic performance, providing you capture the right information from all supply chain players within their respective life cycle.
The inability to utilise the nuggets of information contained in a supply chain information transaction can cause companies to maintain inordinate amounts of inventory to meet the pending demand of their customers. This can be especially true for companies that are trying to maintain perfect order performance, especially when their first line of sight to customer demand is the receipt of an order.
Understanding customer demand and buying trends are key to maintaining an economical supply chain. It can significantly reduce finished goods inventory levels, adding to more positive net income results.
The ability to utilise historical order information can provide tremendous insight into the buying trends of customers, especially if your customers lack the ability to provide accurate demand information. Armed with historical demand information, your organisation is in a position to have a proactive relationship with customers, and it can forge a stronger partnership where both organisations improve their supply chain and overall profitability.
Read the full article on E-Commerce Times here.
