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For example, Panasonic, Samsung, and Sharp must battle for retail shelf space and sales with Vizio, Hisense, and other television manufacturers. Also, the cost of global trade is on the rise. As offshore labor costs increase, global sourcing does not guarantee lower overall cost of goods. In both situations, supply chain management expertise and network flexibility are needed to analyze and respond to these issues. At the same time, globalization can present expansion opportunities.

Organizations with flexible supply chain networks that can adapt to the requirements of new markets will be well positioned to grow. Economic crises such as the recent global recession have a tremendous negative impact on consumer demand and production. Weaker organizations that fail to anticipate the changes, adjust capacity, and reduce inventory levels in their supply chains will not survive. To weather these economic downturns with minimal damage, organizations should build adaptive operating models buoyed by flexible supply chain capacity and a variable cost structure.

They can review product options, compare prices, and check availability in real-time using mobile devices.


This leads to increased expectations for greater product variety, customized goods, off-season availability of inventory, and rapid fulfillment at a cost comparable to in-store offerings. To satisfy these consumer expectations, retailers must be able to leverage inventory as a shared resource and use distributed order management technology to fill orders from the optimal node in the supply chain. In addition, shrinking product life cycles, the emergence of new technologies to facilitate supply chain transformation, and increases in government regulation of supply chain processes like transportation are compelling reasons to remain nimble.

A flexible and responsive supply chain will adapt to these changes with negligible disruption. Beyond the business challenges that emerge over time, organizations may also encounter sudden and severe supply chain disruptions. These atypical events—natural disasters, cataclysmic weather, labor strikes, supplier failures, and so on—negatively affect the flow of goods and make the organization vulnerable to financial, reputational, and relational damages.

Given the cost of disruptions, it is imperative for organizations to manage these supply chain risks. Common predisruption steps include risk identification, risk assessment, and risk reduction. To reduce vulnerability to disruption risks, Sheffi recommends that organizations collaborate on security and safety issues, build redundancies into their supply chains, and invest in people through cross-training.

In addition to preventative risk management steps, it is imperative to establish disruption management capabilities. For known risks, it is important to design resilient supply chains that are flexible enough to bounce back quickly from major incidents Sheffi, For risks that are unlikely to occur but are potentially catastrophic, supply chain managers must engage in contingency planning and test the plans.

The CTO process allows Dell to overcome component shortages by configuring systems in different ways and by enticing customers to specify configurations with components that are readily available. Dell also builds strong long-term relationships with primary suppliers to ensure its priority customer status in times of supply uncertainty.

Finally, Dell preemptively qualifies and reviews secondary suppliers to reduce the risk of inventory shortages. One of the most important roles of supply chain management is to contribute to the financial success of the organization. Traditional initiatives focus on cost efficiency—streamline stock levels to reduce inventory carrying cost, automate fulfillment operations to minimize labor expense, consolidate orders to cut freight spend, and so on.

In contrast, leading organizations use the supply chain to enhance differentiation, increase sales, and penetrate new markets. A dual focus on cost control and revenue generation helps C-level executives recognize the organizational value of supply chain management.

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As they place more strategic emphasis on supply chain management, capabilities must morph from a series of day-to-day functions to a strategic process with supply chain managers who skillfully manage cross-functional and cross-company complexity. They must understand the connections and interdependencies across the organization and conquer the challenges of managing supplier and customer interfaces Dittmann, See All Related Store Items.

Clifford Defee , Brian J. Gibson , Joe B. Hanna Jan 10, Related Resources Store Articles Blogs. In contrast to conventional supply chain management, both the origin of the products and their use and disposal after sale are important. If your SSCM does not correspond to the practical situation in German companies , there are 5 approaches for sustainable intralogistics to keep in mind.

For companies, SCM entails a change of processes and culture. Its objective is to optimize processes, increase performance characteristics, reduce costs and increase customer satisfaction. In order to be successful in supply chain management, you must meet these seven requirements:.

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Process networking requires comprehensive cooperation. This awareness is necessary to build up the necessary know-how. Aim for an open exchange of information with all companies involved in the supply chain. Confirm unrealistic plans: The intelligent and the qualified are successful , not the stronger one. The ability to react more quickly to changes represents qualified process networking. The relation between the production times and the process times in the upstream processes serves as an indicator for the reaction speed. While the production times amount to a few hours or days, the operative process times in upstream processes may take several days.

by Theo Thiadens

Put these times into question. The prerequisite for the required speed and dynamism within the supply chain is a qualified ERP system. The manual execution of standard processes is a thing of the past. We recommend to examine the suitability of the ERP system carefully. Establish a sustainable performance profile with IT systems to reduce complexity in logistics. Suitable ERP systems support your employees in the following areas:.

The integration of information, material and process logistics is not a simple task. Adjust these processes to fit into the chain and do not underestimate the impact of disturbed chain links. A qualified supply chain can only be created if clear process rules and responsibilities are established. A discreet omission of these guidelines poses a typical vulnerability.

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Balancing Demand and Supply with Effective Sales and Operations Planning

Define clear rules and follow them. Software solutions for the value chain are required. Companies are aiming for higher investments in software and technology in their supply chain. At the same time, the focus is shifting from pure cost reduction and resource optimization in the process chain to the needs of customers.

In view of the constantly changing industry environment , choosing the right software is crucial. What are your long-term objectives? The guide to software for the manufacturing industry is intended to help manufacturers find the best system. The guide discusses five key areas relevant to any successful manufacturing operation, including supply chain management software systems. Due to lower transport costs, the shipping costs per volume or mass unit is often no longer a factor in planning.

The Strategic Role of Demand Management in Supply Chains: L10

Telematics systems alleviate the symptoms, but do not eliminate the cause. Clear guidelines put pressure on suppliers to cooperate and minimize risk by introducing additional criteria when planning the value chain. No matter how sophisticated supply chain management may be, lack of communication between customer and supplier and inadequate specifications can lead to major losses in the market or for the customer. Supply chain management as a sub-area of logistics is gaining in importance. Applicants for job offers in Supply Chain Management are advised to complete a business training at a logistics service provider.

The Great Transformation – The Era of Demand Supply IT Begins

Studying economics with a specialization in logistics increases the chance of obtaining a managerial position at middle management level. One of the main tasks of a Supply Chain Manager is the selection and coordination of suppliers. In order to negotiate better terms with business partners, it is advantageous to be able to exploit synergies. Negotiation skills and organizational talent are important traits. English language skills are a basic requirement. The companies are mostly internationally active.

Logistics and transport companies as well as manufacturing companies may be potential employers. Speaking of the future: the digitalization of logistics is resulting in the transformation of traditional job profiles. Nevertheless, the supply chain manager will remain irreplaceable for the foreseeable future.

Further reasons why you should work in Supply Chain Management?