Organizations constitute a complex web of customers, vendors, suppliers, distributors, and business partners. In an increasingly interconnected world,analyzing and utilizing supply chain relationships hold the key to success. With changing economic conditions, manufacturers are hit the hardest with fluctuating customer demands, cost of source products, and implications of offshore products. Businesses face the challenge of quick turnarounds, which becomesincreasingly difficult in the case of overseas products.
The primary objective of companies is to maximize profitability while keeping inventory levelslow to reduce overall costs. It’s a catch 22 position while too little inventory creates problemsin ramping up production to meet the demand for a popular product. Too much inventory results in unnecessary storage costs and additional waste.
The need is for a holistic approach to planning and scheduling the entire supply chain. Supply chain excellence maximizes profits and ensures a powerful competitive advantage in the global marketplace.
Benefits of a holistic approach to supply chain management:
- Create strategic advantage in a volatile market by improving performance aided by real-time insights from operational data.
- With greater insight into your supply chain, you can control the inevitable inconsistencies and changes in the manufacturing industry.
- You can identify your most reliable sources andgain knowledge of when and how they can ship the required products for your customers.
- The holistic approach provides you the required time to manufacture and ship products to customers as per the schedule, within your budget.
- Common bottlenecks and delays can be prevented by streamlining procurement and manufacturing schedules. This also helps to decrease costs on products and shipping when deadlinesaren’t too challenging.
- Gain visibility into the relationship between purchasing and sales-order processing, so that you can easily spot trends and maintain the right stock at the right time.
- You can optimize inventory. A large inventory will constrain cash flow and adversely affect your ability to make investments andimprovements to your business. Inadequate inventory obstructs the ability to cater to the needs of customers.
- Obtain significant and quantifiable benefits in terms of reduced inventory and lower logistics cost while typically maintaining or improving customer service through better forecasting and improved availability.
- Purchases may be tracked down quickly, and approvals can be routed systematically. Moreover, all this information will be available over a secured web, which can be accessed from anywhere.
- Maximize gross margin return on inventory, balancing the cost of inventory at all stages in the supply chain, with availability of customers, and minimizing total operating expenses, i.e., of transportation, inventory, and manufacturing.
If you can anticipate changes in customer demand and vendor pricing accurately, you can handle unforeseen situations. The fact that you can respond quickly and don’t have to look around for a solution makes a huge difference. The results of adopting a holistic approach will be greater flexibility and control over the demand-supply channel.A holistic supply chain approach can also turn potentially disastrous supply chain disruptions into competitive advantage for your business.