Supply Chain Management (SCM)
Invite a supply-chain management tool vendor in, and it's very likely you'll hear the following within the first 15 minutes: “You’ll start achieving results almost immediately," or “Our average client has : slashed lead times by 70 percent, accelerated order fulfillment time by 65 percent, reduced inventory carrying costs by 35 percent, decreased transportation costs by 25 percent, increased forecast accuracy by 30 percent.”
The spiel always sounds great, but most likely, the actual supply chain management (SCM) results won't materialize. Like everything in business there are a myriad of complex decisions to be made going forward. SCM is both an internal and external chain of goods and services.
Identify and respect the power of your supply chain
Many companies dismiss SCM solutions as irrelevant to their business needs because they don't realize that the key to competitive advantage lies within managing the supply chain. Instead, companies often believe success is tied to product design or the ability to sell.
The ability to manage the supply chain enables a company to solve critical business problems, such as customer complaints. In this scenario, companies need to assess customer communications and the current rapport. To get started, ask the following questions:
> How many complaints do you get from customers?
> Are your big customers telling you what to do?
> How well are you able to serve your customers?
> Can you fulfill their requests in a timely fashion?
> Can you fulfill special requests from customers?
> Choose a solution based on business needs
Although it is certainly difficult to change customer focus, the most difficult change most companies need to make to prepare for SCM is choosing the right product. The good news is that there are lots of options, two of which are third-party providers and off-the-shelf software. v In the end, the choice of an SCM solution is often dependent on how crucial corporate strategists consider SCM to be and what the business needs from the solution, says Peterson. For example, if your supply chain doesn’t differentiate your company in any way and the goal is cutting costs, then you may want to consider using a third-party logistics company. But if your supply chain is very complex and company-focused, you may be better off investing in an "out of the box" or custom SCM solution that includes specific process enhancements.
Make sure SCM has top management buy-in No matter what solution appears best for the company, no SCM process should be initiated without top management involvement. The organization's leadership needs to embrace SCM as a transformation occurring within the organization. And it can’t be a transformation through technology alone.
The companies that have mastered SCM do so by implementing technology in conjunction with aligning the organisation and metrics where appropriate. They do so with adapting business processes, by making decisions involving plant or division openings and closings, and by reaching out to key trading partners.