The diagram below illustrates how supply chain is evolving into a more integrated end-to-end, customer-driven supply chain – which is well integrated across the business and all its stakeholders and service providers.
We will look at some of the key points in detail.
1.Synchronizing supply & demand
Understanding demand patterns and efficient planning of supply is the constant endeavor of all supply chain planners. Responsive supply chains are typically characterized by an early understanding of demand signals through minimum distortion of the POS (point of sales) data in near real time.
But why?
Ability and flexibility are key strengths that come through from responsive supply chains. This kind of synchronized supply chain planning leads to competitive advantage that helps provide superior customer service; it also reduces waste and losses due to the suboptimal planning and inventory deployment.
In a growing economy like India, the constant fluctuations in demand and bottle-necks due to infrastructure, pose additional challenges to supply chain planning; but this must still be the area of continued focus as this can enable organizations to respond to constant changes in the market place.
2.New Product Introduction
Innovation is the key to future success. It is also critical for a company to maintain profitable growth especially in view of the increasingly competitive Indian marketplace.
But why?
All successful companies are distinguished by their ability to efficiently bring innovation to the market- quickly and ahead of the competition. Effective product launch is obviously a key element in the innovation process. This however requires process integration and alignment of objectives across the internal and external elements of the value chain.
Leveraging the capabilities of value chain partners, like suppliers and channel members, in a collaborative approach can help bring products / services to the market faster, smarter and cheaper. This means integrating with suppliers & supply chain providers during the entire process of design, development, production and service. After identifying and evaluating these capabilities / resources it is also important to nurture them. Innovation is undoubtedly the biggest competitive advantage and differentiator in the future, but your supply chain needs to support it!
3.Efficient Customer Order Fulfillment
Customer orders start with the order entry process and involve efficient maintenance of customer database, opportunity evaluation for cross- sell, up-sell, back-order processing and post order fulfillment transactions. Customer Order Management being an important customer touch-point means a direct impact on customer satisfaction levels. The company’s ability to receive customer orders through multiple channels, and subsequently understand and respond to customer needs forms part of customer order management.
But why?
Many companies have adopted new technologies that churn data and extract meaningful insights to further enhance fulfillment capabilities. Companies are leveraging technology to enable supply chain visibility to efficiently accept orders & adhere to promised delivery dates. This helps in facilitating processes down the line like planning & scheduling.
Therefore, technology has played an important role in integrating the company’s order management process with the customer’s planning and procurement processes. Overall, this means an evolved on-demand supply chain.
4. Logistics services
- Today's market demands:
- More stocking locations
- Frequent ordering
- Smaller order sizes
- More sophisticated modes of transportation
- Multi-channel distribution
- Configure-to-order capabilities, among others
Customers are becoming more knowledgeable & demanding. They have higher service-level expectations which mean higher degrees of responsiveness and customization from the company. Customers today expect on-time deliveries and value-add services like real-time order tracking information. Innovations in technologies & logistics solutions have also been able to create new customer distribution channels and even existing channels are under pressure to change, to retain the market position a company holds.
But why?
Accurate & efficient logistics management and servicing means Customer satisfaction & retention coupled with continued sales growth. This type of decentralized supply chain models and tighter trading partner collaborations, especially in view of rising transportation costs and other complexities in the system, means new and improved visibility.
Management tools can also help combat any inefficiency that arises in warehouse management, manpower, transportation, space utilization, inventory management and shipments. To summarize, it has ever more critical for companies to implement scalable yet cost-effective strategies in logistics.
This rings ever more true in the back drop of the current economic conditions, which fiercely call for an increase in profitability, improvement in quality & reduction in costs. A mammoth challenge, but possible to execute.