- Roy Strauss
Supply Chain Profitability –Are There Broken Links in your Supply Chain
For over 20 years software companies have developed sophisticated technology tools to improve the coordination and control of material moving through the supply chain. Companies have purchased an enormous amount of technology promising end-to-end supply chain visibility; however, there remains a significant number of weak or broken links in the supply chain where key information simply drops out of sight for considerable amounts of time. Often organizations are unaware of, ignore or deny the existence of these information gaps, however and inevitably these weak supply chain links result in missing deadlines, excess inventory and costs associated with lower customer service.
Over the past two decades North American companies have significantly increased their outsourced manufacturing to Asian, European, and South American vendors. This trend has amplified the number of partners in the supply chain, the interdependencies of associates, subcontractors and raw material suppliers, and the distance that material and information must travel to close this gap.
The information gaps in the form of weak supply chain links are most often found at the outer edges of the supply chain. Any time that raw materials, production parts or finished goods change hands there is a potential for communication breakdown. Of course, physical goods are not the only thing getting temporarily lost in the supply chain; financial flows and critical supply-chain data also contribute to organizations inability to manage their production and inventories and provide optimal customer service.
Organizations need an information system that links disparate applications across multiple partners, languages, geography, and cultures. The emergence of the software-as-a-service (SaaS) model combined with cloud technology in the form of project management and collaboration tools is a positive step in the right direction because it gives everyone in the supply chain and opportunity to identify these weak links and take action to mitigate their impact in a timely fashion. However, today there is a plethora of solutions requiring one to analyze these tools carefully as they have different strengths and weaknesses and different capabilities and degrees of difficulty in terms of execution and implementation and cost is always a factor.
Many companies we encounter do not properly recognize nor emphasize to staff at all levels the importance of supply chain excellence in accomplishing customer service goals and increasing the company’s profitability. They spend large amounts of money hiring marketing and sales experts and on marketing campaigns but do not recognize that supply chain failure can cause customer dissatisfaction and negate those efforts and produce the opposite results of those desired. Many of the executives we meet try to manage their supply chain using available staff as vs. hiring supply chain experts. The result is most often similar to trying to do your own plumbing – the leak gets bigger, and costs increase exponentially.
If you or your organization would like some help identifying weak links in your supply chain and identifying the appropriate collaboration tools necessary to fill those gaps contact a Supply Chain Expert, their motto is "you are only as good as your weakest link". They can help you design a program that delivers both immediate and long-term benefits to your organization. The program will be designed to shift your organizations thinking, improve innovation, and produce programs that will optimize operational performance and satisfy the requirements of your customers. The Supply Chain Expert will provide monitoring systems, cross-company reporting, and train your staff to recognize problems and correct them in a timely manner as well as retrain staff to prevent future occurrences.