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Beyond Forecasting: Responsive Supply Networks in Action

Imagine how easy life would be for the chemical industry if point of sale (POS) information back-exploded the bill of materials the respective manufacture:

 A can of paint gets scanned at your local paint store or large hardware store.  Then, the bill of materials notes how much acrylic resin, anionic surfactant, catalyst, activator, ammonia, pigment, titanium dioxide, filler, biocide, water, etc. has been used.  Somehow, those signals are compiled and sent to the respective manufacturer.  Now that’s responsive replenishment!  Of course, the same concept can be applied to any product that is purchased (toys, automobiles, computers, etc.) where a large percentage of the product originates from the chemical industry.

For now, those capabilities do not exist, so the chemical industry must rely on other channels to generate a responsive network.  The article explores some key considerations:

1.  Leveraging causal factors to examine external trends to make your supply chain more predictive, such as housing permits.

2.  Variability is intelligence.  One must assume that variability exists in both supply and demand, so instead of complaining about it USE it to make dynamic decisions.   

3.  Track and trace technology has been around for a long time (just ask UPS or Fed-Ex).  However, even UPS and Fed-Ex are quite weak if you have ever had to trace a personal package that was lost (this happened to me recently).  The strength lies in the analysis of events to make business decisions.

4.  Collaboration is similiar to the real-estate mantra (what are the 3 most important things in real estate?  location, location, location).  Your supply chain is becoming highly dependant upon collaboration with suppliers, customers, lsp’s, toll manufacturers, etc.  Collaborate, collaborate, collaborate…

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