Going “Green” is not only a trend in supply chain management it
is playing a key role in lean inventory management. While some
firms may be apprehensive at first, implementing a “green” strategy
has lasting effects and is quickly becoming a necessity.
In an Article by, the Network for Business Sustainability they
introduce a survey done of 322 logistics firms, that analyzes the
factors behind the adoption of green practices. Some interesting
information was found. While this article does not...
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Applying SaaS in the Multi-Tiered ERP
Strategy
Research conducted by the Aberdeen group over the past five
years has shown that organizations are now more likely to adopt
multi-tiered strategies for ERP implementation. Best- in-class
organizations are partaking in this new trend and for good
reason.
In an article published on CIO, Castellina, a research analyst
for Aberdeen Group, shows the benefits and reasoning behind
this trend. In a multi-tiered ERP strategy, one standard ERP
implementation...
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Operation Managers must be Trained to “Visualize” Supply Chain
Risk
The current trend in supply chains everywhere is lean inventory
strategies, but in trying to reduce inventory levels, companies
often forget about the impotance os safety stock. Inventory
reserves are often considered to be bad, however it is essential
due to supply chain risk. Many managers focus so entirely on lean
inventory management, they forget, safety stock optimization.
Supply chain managers around the world realize that...
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Guest Commentary: Safety Stock Helps Buffer Against
Variability in the Supply Chain
Safety Stock undoubtedly plays an imperative role in the supply
chain however; difficulties arise when businesses do not know how
to maintain the correct levels of safety stock to allow the company
to operate efficiently.
Micheal Watson, Ph.D, leader for IBM’s ILOG
supply chain applications, clarifies just how important safety
stock is to a company:
“Safety stock allows you to seamlessly meet unpredictable
spikes...
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Manufacturing and Trade Inventories and
Sales
U.S. Department of Commerce released the Manufacturing
Inventories and Sales statistics for December 2011. They provided
the following details:
Sales. The U.S. Census Bureau announced today that the combined
value of distributive trade sales and manufacturers’ shipments for
December, adjusted for seasonal and trading-day differences but not
for price changes, was estimated at $1,230.0 billion, up 0.7
percent (±0.3%) from November 2011 and up 8.9...
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Top 10 Predictions for the Supply Chain in
2012
Building on 2011, Simon Ellis, the practive director of supply
chain strategies with IDC Manufaturing Insights, gives his
predictions and opinions of the overall state of supply chains
moving into 2012.
Here are IDC Manufacturing Insights top10 predictions for the
year:
- The Requirement for Speed and the Ubiquity of
Information Will Create a New Landscape for IT Support of the
Supply Chain.
- Big Data Will Create an Even Bigger Data Quality
Problem for...
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Reports are indicating that companies are beginning to grow their
inventories, contrary to the massive reductions that occurred at
the start of the recession. However, most of these companies are
doing so without the necessary intelligence about where to invest
and how much. This is one of many benefits found through an
inventory optimization solution.
In a recent article written by Marisa Brown, Knowledge Center
Director at APQC, she methodically explains the key components of a
well-defined...
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Since 1997, we have witnessed dramatic improvements in the way
companies achieve targeted service levels at a lower cost, and
improve decision-making by leveraging inventory intelligence.
Imagine the opportunities available if your organization gained the
following results:
- Reducing inventory at Verizon Logistics by $40 million while
maintaining a 98.5% service level.
- Identifying 26% savings at WW Williams and greatly
reducing transfer expenses.
- Decreasing safety stock by 25% in half the projected...
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Inventory optimization is becoming more widely recognized as a
strategic planning tool in many manufacturing and distribution
circles. However, there remains many misconceptions about what
inventory optimization is and what results can be achieved.
Recently Howard Coleman, Principal with MCA Associates,
interviewed Tony Goncalves, Director of Supply Chain for
Northeastern Supply, about his use of an inventory optimization
solution. During their discussion, Tony describes how the benefits
of...
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Understanding the role inventory plays in financial statements is a
critical component of determining the value of an inventory
optimization solution. Writing for Supply Chain Digest, editor Dan
Gilmore walks through the benefits of reducing inventory, and the
impact it has on the Income Statement, Cash Flows, and Working
Capital.
In the article, Dan uses an example of a theoretical inventory
balance of $1 billion, and what effect a 10% reduction of inventory
would have on the business. While...
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Supply chain executives have a keen understanding that effective
inventory management is at the heart of business results. Yet, what
has been elusive to these same executives are how to execute
strategies that optimally balance supply with demand. According to
a recent study by CSCO Insights, they are recommending 5 key
strategies to align the inventory investment with business
objectives.
As part of CSCO's study, is a survey about current perceptions of
the effectiveness of the respondent's...
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Among concerns faced by supply chain executives around the world,
chief among them are fluctuating customer demand and variances in
customer requirements. Adding to these challenges is the need for
protecting margin and reducing working capital, as identified by a
recently released report from IBM titled, "New Rules for a New
Decade."
With consistent pressure for supply chain managers to create value,
end-to-end supply chain cost and pipeline inventory optimization
are predominant challenges. To...
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Responding to the economic crisis, many organizations quickly
reduced inventories in order to mirror new demand realities.
However, as signs increasingly point to a recovery, these same
companies are realizing that perhaps their inventory levels are too
lean.
In a survey published last month by Morgan Stanley, they found that
42 percent of the 500 respondents expect their ordering activity to
pick up in 2011. According to Morgan Stanley, these findings
suggest that the restocking activity of...
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Developing stocking strategies
for slow-moving inventory is an important aspect of improving
overall inventory performance. In order to create effective
strategies for slow-moving inventory, it is important to first
define what is considered slow-moving and then understand the
impact that segment has on business results.
We often find that slow-moving inventory accounts for a significant
percentage of an organization's total number of SKUs, but
represents small portion of revenue. As a result,...
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Results from the latest survey from eyefortransport, The Global
Supply Chain Office Strategy Report for 2011, reveals the top
challenges and projects for supply chain executives in the coming
year. Asking about potential challenges for 2011, the top 5 are:
- Demand Variability (42%)
- Cost Containment and Reduction (39%)
- Supply Chain Visibility (35%)
- Inventory Management (33%)
- Escalating Customer Expectations (33%)
Half of the respondents reported that they have are implementing or
plan to implement...
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Best in class companies are 5 times more likely to utilize a
multi-echelon inventory optimization solution than laggard
companies. - Aberdeen Group
It should be no secret that best-in-class companies apply effective
inventory management practices to achieve best-in-class results.
But what Aberdeen Group has accomplished in a recent brief is to
quantify how many companies are applying these practices.
The brief published in December recommends inventory optimization
strategies for the Chief Supply...
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Every industry involved with holding inventory runs the risk of
building slow-moving and obsolete inventory. Some organizations
have created positions with specific responsibilities for managing
this under performing asset.
In a recent posting by SupplyChainBrain, consultant Lora Cecere
offers three action points to address this universal challenge. The
three actions she suggests are:
- Some excess and slow-moving inventory develops from new product
launches. There must be a process in place...
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Best-in-class companies often find themselves under the microscope
of their peers because their peers want to mirror what they do in
order to achieve improved business results. The popularity of
specific business practices and ideas from best-in-class companies
can say a great deal about where other organizations see the
greatest room for improvement. For example, the most popular idea
during the past year is incorporating advanced analytics into
standard inventory planning practices. Other...
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A recent article in Supply & Demand Chain Executive
highlighted some of the common pitfalls that occur when
implementing and using an inventory optimization solution. Author
Mike Valentine detailed three of these pitfalls, and they include:
- Upfront investment, often greater if performed in-house
- Gap in skills, with either inventory planners or
IT personnel
- Employee turnover and succession planning
While the above pitfalls can be easily addressed by using an
effective outsourced vendor, there are...
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The benefits of inventory optimization can be substantial for the
right organization in terms of reducing inventory and achieving
targeted service levels. According to Lora Cecere, industry expert
for Altimeter Group, there are some challenges to overcome in order
to effectively implement such a solution. In an interview hosted by
TechTarget, Ms. Cesere described the two major challenges as:
- Inventory planning expertise - it's critical to have the
analytical skillset
- Management focus on working...
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