Achieving The supply Chain Nirvana Of Meeting Demand While Minimising Stock
Meeting demand whilst minimising stock levels was identified as a top current challenge in a new Supply Chain Management survey conducted for Access Group. Identified by 45 per cent of companies (rising to 53 per cent of larger firms), this was a leading issue among a range of current supply chain challenges, and is further examined in an accompanying white paper: ‘Supply Chain Nirvana’.
Conducted for Access Group by Redshift Research, the Supply Chain Management (SCM) study follows the company’s well received (Warehouse Management Software) WMS survey. The SCM study conducted 300 interviews amongst a random spread of business decision makers working in UK manufacturing and logistics businesses in October 2013.
Supplier reliability topped the list of key impediments to meeting demand whilst minimising stock levels. This was the case for 32 per cent of companies, and rising to almost four in ten of small firms. Other problems revealed by the survey included communication difficulties with suppliers and customers as well as the disruptive effects of production bottlenecks and rush jobs.
“Most companies still tend to be very reactive to supply side problems. Typically, a firm doesn’t know there is a problem until supplies fail to arrive,” said Ian Roper, divisional director, supply chain solutions at Access Group. “Because companies are running on leaner stock levels and lower contingency allowances in order to free up cash, while customer expectations of perfect fulfilment in ever-shorter time frames continue to grow, the effects of poor supplier performance are magnified, often disrupting production and fulfilment across many lines and to many customers.”
Common factors, especially among companies that may be said to be lagging in their IT infrastructure development, are a lack of useful visibility not merely of orders, production and stocks, but of the cost and time implications of different events and options.
Roper concluded: “As we suggest in the accompanying white paper, some of the answers to these issues include true integration between MRP systems, production scheduling, forecasting, stock and inventory control and so on, complete with cost and time information. To coordinate this information, Business Intelligence systems can help ensure that the relevant information is collected, applied and distributed so that the moving target of orders can constantly be met through an appropriately and continually adjusted minimum inventory strategy.”
To receive a copy of the white paper, ‘Supply Chain Nirvana’ and the survey, please contact: [email protected]