Wednesday, 4 June 2014

Managing Supply Network

The whole supply network needs to be managed as an integrated entity. The supply chain must be included as if the supply chain can’t survive there is no way the organisations inside it will survive either.  The traditional structure isn’t going to be enough, integrated supply chains must compete against other supply chains and this requires different skills compared with the old structure in order to achieve global market leadership.

One of the characteristics to focus on is how the supply chain is constructed in terms of the flow model. This dimension will decide how big the supply base is, where the suppliers are based, what the connection channels are and how wide the vertical integration is, how much outsourcing is being used, among other things. The outsourcing within the supply chain network is now considered one of the most strategically important functions.

Sharing Information
A shared information system is required and this can be challenging. All information such as forecasting, capacity and production should be managed collectively in order to reduce the inventory levels and help the organisation to achieve shorter lead times and faster deliveries.  The supply network will be leaner thanks to the reduced number of unnecessary materials and but the investment in the new information sharing systems will get higher.

Managing the supply chain risk is the next challenge. Reserves can be used to mitigate the risk for inventory, capacity and redundancy suppliers. At the same time it’s necessary to maintain the strength of the organisation ensuring it is responsive and efficient.

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