Speed crucial in Supply Chain?

Consistency and cost efficiency is important. But speed is the new supply chain differentiator. What works today won’t necessarily work tomorrow – a simple saying that couldn’t be more apt to modern supply chains.

We live in a day and age of consumerism and globalization. If you deliver promptly you win the contract. Product qualities are becoming increasingly equal as information flows faster. As a result, demand cycles are increasingly unpredictable, driven less by-product advantage than by logistics advantage. Goods need to go from research and development to the shelf in record time in order for companies to compete for a portion of the fast-growing market.

To master the modern supply chain environment, we must first understand the notions of speed and agility.

Modern supply chains
At the moment, outsourcing some or the entire logistics role and then optimizing them have had a remarkable impact on the income statement and balance sheet for many companies. It has also decreased risk profiles for many distributors and marketers. A logistics partner with the expertise to re-engineer and take the supply chain off the balance sheet can significantly reduce the number of funds required to maintain operations, improve profitability, service levels, and tone down business risks for producers and marketers of products.

It has been said that 85% of potential logistics cost savings come from integrating the supply chain, but optimization also positively affects cash-to-cash cycles, customer service, loyalty, and sales. While logistics outsourcing may have had a cutback on costs as its original objective, globalization has brought time reduction and reactivity to the forefront.

Speed and flexibility
Wherever speed and flexibility are critical, you need quick information from the marketplace that’s consistent. Visibility of your product helps to identify difficulties such as availability, stock shortages, and overloaded stock. Creating integrated visibility enables supply chain managers to assess customer demand in time to satisfy it. Thus far, technology and information systems provided in conjunction with demand planning and record optimization, make it possible to drive effectiveness through agility and flexibility.

Responsiveness
Getting the right cargo to the right place at the right time can give a product a chance to compete and succeed. A good example of this is FedEx South Africa. They are known for being punctual, delivering great results, and satisfying their customers’ needs, not to mention the high profit the company is making. Being able to respond on time and efficiently to alternate demand helps to prevent lost sales and also to reduce write-offs of overloaded stock.

On the other hand, a lack of speed can lead to excess stock as trends change, or out of stock and the sure knowledge that a business never knew the potential of a product.

Being able to move goods quickly to high-demand spots and withdraw stock from low-demand areas is vital. Keeping tabs on demand patterns and the efficiency of reverse logistics systems also contribute to agility and flexibility.

For most supply chain managers, the biggest challenges remain planning and forecasting. In the perspective of a continually evolving supply chain, the inventory models and business prediction instruments still in use today are less and less likely to work accurately as demand becomes more driven by innovation and the availability of supply. But while we are becoming less and less able to expect demand, we can react to it. And those who react fastest will be able to corner markets better than their competitors. 

As the market continues to change at a pace, a supple, flexible, and responsive supply chain can open the way to clear competitive benefits. If you need Supply Chain candidates to give your company these great benefits, let us help!

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Image Credit: FreeDigitalPhotos.net by adamr