Consistency and cost efficiency is
important. But speed is the new supply chain differentiator. What works today
won’t necessarily work tomorrow – a simple saying that couldn’t be more apt to
modern supply chains.
We live in a day and age of consumerism and
If you deliver promptly you win the contract. Product qualities are becoming
increasingly equal as information flows faster. As a result, demand cycles are
increasingly unpredictable, driven less by product advantage than by logistics
advantage. Goods need to go from research and development to the shelf in
record time in order for companies to compete for a portion of the fast growing
To master the modern supply chain
environment, we must first understand the notions of speed and agility.
Modern supply chains
At the moment, outsourcing some or the entire logistics
role and then optimising them have had a remarkable impact on the income
statement and balance sheet for many companies. It has also decreased risk
profiles for many distributors and marketers. A logistics partner with the
expertise to re-engineer and take the supply chain off balance sheet can
significantly reduce the amount of funds required to maintain operations,
improve profitability, service levels and tone down business risks for
producers and marketers of products.
It has been said that 85% of
potential logistics cost savings come from integrating the supply chain, but
optimisation also positively affects cash-to-cash cycles, customer service,
loyalty and sales. While logistics outsourcing may have had a cutback on costs
as its original objective, globalisation have brought time reduction and
reactivity to the forefront.
Speed and flexibility
Wherever speed and flexibility are critical, you need quick information from
the marketplace that’s consistent. Visibility of your product helps to identify
difficulties such as availability, stock shortages and overloaded stock.
Creating integrated visibility enables supply chain managers to assess customer
demand in time to satisfy it. Thus far, technology and information systems
provided in conjunction with demand planning and record optimisation, make it
possible to drive effectiveness through agility and flexibility.
Getting the right cargo to the right place at the right time can give a product
a chance to compete and to succeed. A good example of this is FedEx South Africa. They are known for
being punctual, delivering great results and satisfy their customers’ needs,
not to mention the high profit the company is making. Being able to respond on
time and efficiently to alternate demand helps to prevent lost sales and also
to reduce write offs of overloaded stock.
On the other hand, a lack of speed can lead
to excess stock as trends change, or out of stock and the sure knowledge that a
business never knew the potential of a product.
Being able to move goods quickly to
high-demand spots and withdraw stock from low-demand areas is vital. Keeping
tabs on demand patterns and the efficiency of reverse logistics systems also
contribute to agility and flexibility.
For most supply chain managers, the biggest
challenges remain planning and forecasting. In the perspective of a continually
evolving supply chain, the inventory models and business prediction instruments
still in use today are less and less likely to work accurately as demand
becomes more driven by innovation and availability of supply. But while we are
becoming less and less able to expect demand, we can react to it. And those who
react fastest will be able to corner markets better than their
As the market continues to change at pace,
a supple, flexible and responsive supply chain can open the way to clear
competitive benefits. If you need Supply Chain candidates to give your company
these great benefits, let us help!
We have great Supply Chain jobs
opportunities. Visit our vacancy page and apply now!
Image Credit: FreeDigitalPhotos.net by adamr