Is it time to integrate your supply chain design with execution?
It wasn’t that long ago that integrating all the strategic, operational and tactical aspects of your end-to-end supply chain was considered a pipe dream.
Times sure have changed!
Customer expectations for product availability and seemingly endless purchasing channels are driving many companies to move product faster and smarter than ever before. Today, a company’s success is largely driven by:
- its network design and how that company manages its supply, production and distribution locations
- its inventory management and where and how well it deploys inventory to optimize customer service levels and profitability
- its transportation management and how well it continually procures, plans, executes and monitors freight.
Let’s take a closer look at each of these key areas.
Network design — the strategic foundation of your supply chain — has certainly come a long way. It wasn’t that long ago when designing your supply chain network was like doing your tax return. You didn’t necessarily want to do it, but at least once a year you had to dig in and run some analysis, see if you were leaving any money on the table and ensure you stayed out of trouble.
Today, the strategic decision of “where to locate my next distribution center” is critically important for most companies to win customers and compete with companies like Amazon. Equally important, having an optimized plan — one that determines which products should be manufactured at which locations and shipped to which distribution centers and retailers — is more likely to be a weekly exercise rather than an annual one. For many companies, this represents a significant mindset change.
Likewise, operational considerations like optimized inventory management have never been more important. Companies today are increasingly using multi-echelon inventory optimization to “slice and dice” product consumption patterns, revenue, margin, cost-to-serve, channels, velocity, seasonality and other key attributes to optimize inventory strategies. By doing so, they can quickly adapt inventory and stocking strategies to address changing market conditions, business objectives and supply chain constraints.
Finally, the tactical aspect of your end-to-end supply chain — transportation modeling — has become more important. The ability to procure, plan, execute and monitor freight across multiple modes, borders and enterprises is a huge challenge, but leading companies are finding new ways to quantify and optimize logistics plans to balance service and cost trade-offs.
These three vital areas of supply chain management — network design, inventory optimization and transportation modeling — create a formidable competitive advantage when integrated. For example, by helping integrate the strategic, operational and tactical aspects of an automotive company’s supply chain, JDA helped identify ways to reduce greenhouse gas emissions by an estimated 25 percent while also reducing costs by about 10 percent.
When it comes to integrating the strategic, operational and tactical elements of your supply chain, there’s never been a more important time to reexamine your strategies. Learn how JDA Supply Chain Strategist can help you accelerate your network design initiatives to tackle unprecedented industry volatility today.