Part II: Fine-Tune Your Supply Chain to Achieve the Next Level of Savings

In Part I of this thought-leadership media alert series, David Johnston, JDA Software’s senior vice president, manufacturing and wholesale distribution, recently shared strategies for leveraging the supply chain to survive in today’s economy. Quickly increasing cash flow, successfully leveraging brand strengths, accurately responding to changing market conditions and gaining a sharper understanding of consumer demand are key ways for companies to enhance their competitive position and improve financial results.

For companies looking to take their supply chains to the next level, Johnston outlines additional best-practice strategies that companies can adopt during the economic slowdown.

• Fine-tune forecasts. One way to realize quick savings is to fine-tune existing statistical parameters to increase forecast accuracy. Increased competitive activities and changes in consumer-buying behaviors during the economic slowdown may have shifted the demand patterns of your products and reduced the accuracy of your forecasts. When this happens, you need to adjust the statistical parameters that are used to generate the baseline demand forecast for these products. First, identify where demands have shifted, determine if existing statistical parameters are still valid, and then tune the parameters to reflect the current market.
• Save money…and the planet. Companies are finding that the push to “go green” not only helps the environment—it also helps their bottom line. Fuel and logistics have been the primary focus as companies seek to become more environmentally friendly, but utilities can be another key area where substantial savings can be realized. By synchronizing the overall supply chain through integrated planning and optimization, companies can be more proactive to reduce waste around everything from processes and resources to raw materials and logistics. Less waste means more cost-savings and a more environmentally friendly operation.
• Broaden the scope. Traditionally, supply chain operations have been focused on synchronizing three areas—forecasting, inventory and logistics. Not much attention has been given to suppliers and raw materials. By expanding the flow of information upstream to manufacturing, raw materials and suppliers, companies can enhance visibility and cooperation.