What do you get when you have a supply network with a demand side of the equation that is becoming more volatile – and a supply side that doesn’t respond quickly to change?
You get an organization that is having problems planning and executing with speed and precision. And for a company has a supply chain spread across the world, this leads to a lack of visibility and lengthy decision-making processes that can stifle business. These challenges can affect customer service, inflate lead times, and increase inventory costs.
To avoid this demand/supply dilemma, supply chain executives are looking for ways to respond more quickly and become more demand driven. A colleague of mine, Michael Lipton, Senior Director of Supply Chain Solution Management at SAP, recommends three best practices that can help companies adopt demand-driven strategy through improved planning and collaboration across the supply network.
Here are some highlights of the practices that Lipton suggests, which appeared in an article entitled, Become a More Demand-Driven Organization: 3 Best Practices to Improve Planning and Collaboration Across Your Supply Network.
- Improve visibility through collaboration. A greater collaboration between your company and its partners can decrease the cost of procurement, sales, and inventory processes and, at the same time, reduce lead times. These benefits, in turn, lead to better supply chain visibility as well as reductions in inventory, better product quality, and improved delivery performance.
- Optimize inventory across your network. Lipton notes that this is a key success factor if you want to become a demand-driven organization. The balance between too much and too little inventory can make or break companies. Demand-driven companies are taking advantage of best-in-class technologies that are helping them dynamically and reliably set an ideal inventory target throughout their entire chain. Just imagine what a more optimized inventory could do to improve your relationships with customers and increase your competitive advantage.
- Shrink your time-to-action with responsive planning. Reacting quickly to market changes is the name of the game these days. It’s important to be able to respond immediately to customers and suppliers through what Lipton refers to as “high-speed replanning and what-if analysis.” This goes beyond the traditional material resource planning of today and instead uses a rules-based solution to prioritize demand, enabling companies to respond to new demands while protecting orders and committed forecasts.
For each of these practices, Lipton shares with you how an SAP solution can help your company become more demand driven and more competitive. If you want to achieve significant top-line, bottom-line, and working-capital benefits, check out Lipton’s advice in article below.
Read the full article Become a More Demand-Driven Organization: 3 Best Practices to Improve Planning and Collaboration Across Your Supply Network now! (No registration required.)