It's just not as easy to make a dollar today than it once was. From multinational corporations, all the way down to one-man shops operating out of a garage, companies are looking for ways to squeeze out a few more dollars of profit by cutting expenses. Besides recycling paper clips or cutting back on donuts on the Friday staff meeting, most companies can still optimize their supply chains to wring out those much-needed extra dollars. In some cases, supply chain optimization can be more than just minor tweaks for the bean-counters, big companies are often able to take huge savings.
Manufacturing Insights' report examines the reasons why this type of optimization is needed. An increasingly global marketplace, new customer and product initiatives, and more complexity all around point to the need for a supply chain that is agile and efficient. Manufacturing Insights offers up three detailed tips for creating a framework for achieving this efficiency. The first area revolves around aligning supply processes to demand--creating a pull-oriented supply chain. This leads to the second area, which is to align and balance supply with demand, bringing in all partners together in a network-wide system of collaboration. Lastly, the report recommends making an investment in being able to respond quickly to unexpected events, adapt quickly to global changes, and become more responsive to these changes as they occur.
Supplier networks and various e-procurement products have made a big mark in the area of supply chain optimization, bringing in an element of automation, as well as purchasing efficiency by giving companies the ability to instantly have access to information from multiple suppliers. Forrester's report this week notes that e-procurement supplier Ariba is opening up its own Ariba Supplier Network to companies that use e-procurement products from competing vendors, such as SAP and Oracle. This move by Ariba will mean big changes. SAP and Oracle can now use Ariba's large supplier network--but Ariba still comes out ahead of the game since they can now further monetize their Ariba Supplier Network and create new revenue streams. Smaller supplier networks will lose out; Ariba and its larger competitors all take a big win on this one.
A global supply chain makes you think about things you've never thought about before, such as the value of the Chinese yuan. Long controlled by the Chinese government, the yuan traded briefly last month outside of the government-controlled range of 8.276 to 8.280 to the dollar. According to Gartner's research this week, this triggered significant speculation that a re-valuation of the yuan is in the making. Those with global supply chains are very likely to have at least a few China connections, and this will have a big impact. And even if you don't have a direct connection in China, it may still impact your supply chain, because a re-valuation of the yuan will limit the sourcing options of large mass retailers, with whom you may have a connection. Gartner says no immediate action is necessary, but recommends evaluating your system requirements for insourcing supply chain processes, or finding domestic sources or alternative international sources for your goods.
