7 Reasons Why You Should Optimize Your Supply Chain
Aug. 1, 2016
Effective supply chain communication is critical to virtually every area of your manufacturing business. Relationships between suppliers and OEMs can sometimes be tenuous but they require intense collaboration to work.
Effective supply chain communication is critical to virtually every area of your manufacturing business. Relationships between suppliers and OEMs can sometimes be tenuous but they require intense collaboration to work.
Trust between manufacturers and suppliers is critical. Many times the relationship is confrontational, where the purchaser holds the upper hand. The collaborative management required by increasingly complex products means a fundamental change needs to occur in the nature of these relationships.
Optimizing your supply chain means going beyond just linking information systems—it means increasing transparency and visibility so your supply chain management fosters collaboration. Most likely however, your supply networks look more like the following scenarios and if any of these are true for your supply chain, they are reasons for you to optimize ASAP:
Limited to no IT integration within and between suppliers in fundamental areas like forecasting and demand management.
Limited, if any, shared quality data and process-based collaboration between suppliers.
Too much reliance on siloed or functional metrics that only allows one view of the supply chain’s performance.
An inordinate amount of product, service, and supply chain network complexity.
Manual, siloed workflows where supply chain visibility is non-existent—leading to manual work-around programs and gross margin leakage over time.
Sales and operations planning workflows done by hand and not aligning with how subcontractors and suppliers work.
These reasons underscore why it’s critical that both manufacturers and suppliers need greater levels of integration. Integrating and optimizing your supply chain networks can increase collaboration so you can drive down the cost of quality and reduce time-to-market.
