Quick response processes
To improve efficiency throughout their supply chains, some companies have turned to quick response processes.
Quick response is a method that allows manufacturers or retailers to communicate inventory needs for their shelves or assembly lines in near-real time. These companies have traditionally communicated with business partners about inventory replenishment via electronic data interchange (EDI) systems, faxes or phone calls. But with the advent of the Internet, a growing number of organizations have been turning to Web-based systems.
High-profile companies that are either are in the process of implementing or have installed such systems to boost the efficiency of their supply chains include Switzerland's Nestle SA, San Francisco-based Levi Strauss & Co. and Toronto-based Canadian Tire Corp.
Advocates claim that quick response systems can help retailers and manufacturers trim the fat out of supply chains, speed up the time it takes to replace depleted inventory, help avoid stock-outs and boost the number of inventory turns (when a retailer or manufacturer turns over its entire inventory).
Companies that offer quick response technologies include SAP AG, Logility Inc. in Atlanta, GlobeRanger Corp. in Richardson, Texas, and i2 Technologies Inc. in Dallas.
Get Real
Quick response takes a variety of forms. "Real time is a different thing to different people," says George Brody, president and CEO of GlobeRanger. "So quick response means different things to different people." For instance, he says, for some folks, asking for data in real time might mean once an hour, for others, it might mean or once a day.
The process requires a company to share what could be seen as proprietary data about its sales and manufacturing operations with its partners. Some executives might be hesitant about this for fear of exposing sensitive information about their companies' products or business strategies to their rivals, say observers.
Nevertheless, when implemented correctly, quick response can be an integral component in helping organizations create lean and efficient supply chains.
"Our supply-chain efforts are based on real-time customer information, quickness and speed," says a spokesman for Dell Computer Corp. in Round Rock, Texas.
On the Cutting Edge
Dell is widely viewed as being on the cutting edge of supply-chain management. For instance, if Dell.com receives an order from a customer for a DVD device, that request is passed along to Dell's suppliers. If the suppliers can't meet the demand for some reason, they will signal back to Dell, which will then notify the customer that the item is out of stock or unavailable.
Procter & Gamble Co. in Cincinnati recently detailed its own plans to establish a quick response system through its entire supply chain. The system is expected to connect a variety of participants, from raw materials suppliers through the manufacturer to distributors out to retailers and on to consumers, says a Procter & Gamble spokesman.
The firm, which makes consumer products ranging from Pampers to Pepto-Bismol, says the system will help it manufacture the right products as needed and get
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