Putting intelligence in your supply chain

SUPPLY chain efficiency is the holy grail for any manufacturer and can make or break a retailer in today's globalised, fiercely competitive market.

SUPPLY chain efficiency is the holy grail for any manufacturer and can make or break a retailer in today’s globalised, fiercely competitive market.

The push for ever decreasing costs and timelines, combined with rising demands and requirements for quality, security and customer satisfaction often seems an unachievable combination especially with ever more complex internal supply chains.

When you add to this the wildcard of forecasting quantities and timelines with brand-disloyal consumers, for many companies it seems just too complex a challenge to overcome.

However, when a wholesaler’s inability to adequately maintain inventory control or respond to sudden changes in demand for stock means that a retailer cannot meet final consumer demand, or, conversely, poor sales data from retailers results in inadequate forecasting of manufacturing requirements, then it’s time to recognise that the supply chain can no longer be managed in isolation.

Business planning

Companies can gain positive results from improved analysis, measurement and reporting through the introduction of business intelligence tools in the supply chain.

Tangible benefits include increased customer service and lower costs from improved inventory and delivery management, and soft benefits, such as improved teamwork and better decision-making.

Examples where integrated business intelligence can support your supply chain include:

* Know your customer / supplier service levels and align to them – Aligning to how your customers measure your service so you can measure consistently with how they do, is really important to ensure you command shelf space, move stock and are not wearing unnecessary overheads due to incorrect shipments. To understand who you’re servicing well, which products are causing problems and which ones aren’t, technology support in the form of a business intelligence tool can help you analyse and draw insight from your data so you can benchmark and measure performance at a granular transactional order by order level or top-line aggregated level.

* Profile your stock and deliveries – Analyse your stock, delivery and demand history regularly to ensure you know which items are generating 80% of your sales revenue and to which class of customers they are being delivered, and are they being delivered correctly, in full. Then check your service levels and holding costs of the remaining products represented by 20% of sales. You could be serving your customers perfectly but hold too much stock at high cost,, holding just the right quantities of stock to satisfy demand will minimise cost.

Reviewing, for example, movement and Delivery in Full on Time (DIFOT) of product by tonne, pallet, carton, each can lend amazing insight to achievement of service levels, operational issues and dynamics. This is a key issue facing many manufacturers today. With both of these analyses, managers can detect issues and formulate a corresponding strategy easily.

* Make better decisions, faster – If the aim of the supply chain is to deliver customer requirements at the lowest possible cost, then you have to address impediments to optimal performance and outcomes. Optimising supply functions demands that all participants understand the impact of failure in any one part of the supply chain — an effective analysis and reporting solution will deliver this.

In understanding the root cause of an issue by tracing cause and effect, better analysis and understanding of supply chain deliveries and inventory held can foresee issues ahead of time, such as when and for how long you have low or no stock, as well as which customers are impacted.

A performance dashboard can pull core transactional data from your ERP system (Oracle/JDE, SAP, BPCS, MFG Pro, Movex and others) and present it in a visual way that makes sense to you, the way you work and your business targets.

It will help you see how you are performing day in, day out and view trends over given periods. Implementing an effective data analysis and reporting solution isn’t complicated and shouldn’t take a long time to deploy (weeks, not months).

Integrated intelligence

In summary, there needs to be consistency between business drivers and the objectives of the supply-chain.

Business intelligence solutions integrated into the supply chain facilitate sharing of quality information for optimal planning and ensures businesses know ahead of time how they’re performing to service levels, stock and other key success factors at a granular customer, product, region or supplier level.

In turn, this reduces complexity in the supply chain and simplifies processes within, and between organisations, to allow every member of staff involved make better decisions, faster.

* Phil Langdale is co-owner and services director of Inside Info – www.insideinfo.com.au, 1300 768 110.