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Four Supply Chain Strategies for 2011

By Herb Shields | 03/08/2011 | 6:03 PM

 

We are just two months into the year and oil has hit $100/barrel, inflation has become an issue, and people are still trying to understand how the recovery is impacting their plans for 2011.  A colleague of mine, Ara Surenian of Cadent Resources, published what I thought is some very good advice for companies as they contemplate the emerging issues.

 "Here are four improvement strategies for the remainder of 2011:

  1. Collaborate! Now more than ever is the time to actively communicate with your customers and suppliers. Where possible use technology to share data and demand plans. Extend your planning process to include your suppliers. Imagine if you and your suppliers were tied together with a taught string. You pulling on supply prompts your vendors to react immediately to your needs. Collaboration via data sharing and active communication eliminates the natural slack in manual processes that introduce delays and demand and supply volatility and inaccuracies.
  2. Become faster. Implement lean manufacturing methods to reduce waste and become more nimble. You want to be in a position to respond quickly. Reducing lead times both internally and externally is critical.
  3. Measure. We are big proponents of data based decision making.  As the economy is slowly picking up, you need to evaluate the following to get peak performance from your ERP.
    1. Are your lead times and run times all up to date?
    2. When was the last time you did an ABC reclassification of finished goods and purchased materials?
    3. Take a hard look at your customer service measures. Are there holes in your performance? Often if there are issues inventory is to blame which could mean you have capacity issues or do not have appropriate inventory policies. The new normal dictates a continual review and adjustment of these levels.
  4. Refocus. It is a great time to revitalize your continuous improvement efforts.
    1. Assess your top issues, concerns, priorities?  What improvement in these areas would provide the biggest P&L dividend to your business?
    2. Regarding collaboration, put a CI team in place with your major customer or supplier to improve or implement a Collaborative Planning Process.”

 

Cadent Resources offers an excellent “front end” for demand planning and inventory optimization that companies are using today to improve the performance of their ERP system.  If you want to check that out, go to www.demandcaster.com

And if you have any feedback on these suggestions, I would like to hear from you.

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About Herb Shields

Herb Shields

Herb Shields has run Chicago-based HCS Consulting since 2000, helping clients across multiple industries and in higher education improve their supply chain strategy and execution. Shields has more than 30 years as an operations executive for capital equipment, automotive, electrical machinery and consumer products companies. As vice president of materials management at consumer goods company Helene Curtis, Shields led the supply chain organization that helped Helene Curtis win "Vendor of the Year" awards from Wal-Mart Stores and Target Corp. Shields has a B.S. degree in Electrical Engineering from Clarkson University and did graduate work in business at Bowling Green State University.



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