Supply Chain Optimisation: Moving Beyond Estimates, Expediting and Excel
Part 5: IT is critically important to the realisation of these cost reduction opportunities as it supports and enables supply chain agility in the following ways:
From this IT perspective therefore there are a variety of key supply chain performance enablers, these include:
Of these, however, Supply Chain Optimisation (SCO) is the leading current IT enabler for agility where the supply chain is too complex for manual optimisation and there is a need to integrate and continuously align demand with supply. The more agile a supply chain is, the more complex the supply chain issues become and the ability to replan frequently and at short notice becomes a necessity. Additionally, collaboration with supply chain partners is increasingly required and for this to be achieved a system supporting strong collaborative IT capabilities is required.
The core functionality of SCO (supply chain optimisation) as a process is depicted below:
This functionality requirement leads to the core architecture of a supply chain optimisation (SCO) system as shown below:
Process integration with business collaboration is depicted in the diagram below. CPFR – collaborative planning, forecasting and replenishment – is fast becoming a hot topic and emphasises the power and importance of information… when it is shared.
Supply chain optimisation involves a concerted effort from all parties and the necessary transparency of information requires trust which is a rare attribute in the business world and is viewed as being counterintuitive by many. Is all this effort and expense worthwhile? The benefits that can be yielded (published in the past by PRTM) include:
Thankfully the SCO system does not need to be fully implemented in one single big project in order yield significant benefits to the business / supply chain. Realising ‘quick hits’ cements commitment to the implementation of the SCO system and keeps the implementation project’s momentum high which is always a bonus with change programmes. The table below shows typical stages of an SCO implementation and the benefits achievable with having implemented each stage successfully.
Summary of Supply Chain Optimisation (SCO):
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Supply Chain Optimisation
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