Written by: Terry Weiner The following post is #11 and is the final blog on Supply Chain Optimization. Our goal for the entire series of posts was to provide an overview of the Supply Chain Optimization process and highlight some of the concepts and tools that are part of the Manufacturing Extension Partnership (MEP) Supply Chain Optimization Initiative. Click here to read earlier posts. |
In most of the surveys we see about
supply chain challenges, supply
In the ideal world of a demand driven supply chain, flow of product to the end customer and from the furthest upstream supplier would be synchronized to provide a smooth and efficient flow of material that is also responsive to demand variation.
The goal of supply chain visibility is to reduce business and supply chain risk, while improving lead times and performance, and identifying shortage and quality problems along the supply chain.
So why is this ideal state so difficult to achieve? To understand the problem we need to first look at the real world as it exists today. To begin with, information in most organization exists in silos. The sales department has its projections and budget, production has its production schedules, buyers have supplier cost and delivery schedule data, etc. The focus of this fragmentation of data is designed to serve the purposes of the individual departments in the organization instead of that of the entire supply chain. In addition, each of the suppliers and customers has their own silos of information, not commonly shared with other supply chain partners.
In a recent Gartner research paper (April 2013) the goal of supply chain visibility was described as follows -
"The aim of end-to-end supply chain visibility (E2ESCV) is to provide controlled access and transparency to accurate, timely and complete events and data — transactions, content and relevant supply chain information — within and across organizations and services operating supply chains"
So how do we get there from here?
A concept that has gained a lot of discussion lately is that of the supply chain control tower. The control tower makes key data available to the partners in a supply chain that facilitates coordination of customer demand with supplier response. For a supply chain control tower to transform available data into usable information development is required in three areas:
The real time end-to-end data that the supply chain control tower provides enables companies to manage demand signals more accurately to reduce inventory levels, answer customers’ requests faster and more accurately, and smooth the effects of demand variation.
Terry Weiner is a Senior Consultant with California Manufacturing Technology Consulting® (CMTC). He has over 20 years experience in process improvements, quality management implementation and supply chain optimization.