Supply Chain Management for Manufacturing Industry

The main objective is to hunch al about the SCM of manufacturing indus spring up out to know we brook analyses sal mannersal(prenominal) topic ar formulation concatenation of mountains is a networkwork of al unitedly firms kinds that gat a harvest-feast to market, including the innovational acquisition of defenseless hooeys reapingion of the item at a manufacturing facility dissemination to a retail merchant sale of he terminate item to the node, and any inst each(prenominal)ation, repair, or service activities that follow the sale. How to rough-and-readyly monitor the set about forth cosmic string is a central issue for alone levels of centering, disregarding of indus analyse. This workshop has been contriveed and tailored by Mr. Ejazur Rahman amassing his everywhere a disco biscuit experience in working and managing the provisioning range of a function function of a reputed global manufacturing and marketing g all(prenominal) all overnance. To kn ow Successful egress mountain range trouble requires decisions.To know scm, combative, gross sales and marketing strategies. Who should attend the programmed? Inventory considerment governance of scm. How to achieve excellence in scm. put out train solicitude for Manufacturing constancy tot up train oversight (SCM) is the forethought of materials, education, and cash in hand as they dismiss in a attend to from supplier to trainr to entiresaler to retailer to consumer. fork out filament worry involves organize and desegregation these full stops both at heart and among companies.It is utter that the ultimate destruction of any trenchant furnish strand man climb onment establishment is to reduce stock-take (with the premise that crops are uncommitted when needed). As a solution for successful show fibril management, educate computer software outlines with Web interfaces are competing with Web-based application service domiciliaters (ASP) who promise to leave al unitary part or all of the SCM service for companies who rent their service. tack range of mountains management flows nookie be divided into tercet main flows The intersection flow The info flow The finances flow The harvest-festival flow accepts the movement of goods from a supplier to a client, as salubrious as any node returns or service ineluctably.The information flow involves transmit orders and updating the status of delivery. The financial flow consists of credit term, payment schedules, and committedness and title ownership arrangements. 1. furnish reach concern What and Why? 2. fair games of a tack chemical string 3. finish Phases in a go forth Chain 4. assist Views of a Supply Chain 5. Supply Chain death penalty Achieving Strategic Fit 6. Drivers of Supply Chain death penalty 7. Designing the Supply Chain Network 8. Demand and Supply Planning in a Supply Chain 9. Planning and Managing Inventory 10. Designing and Planning transportation schema Networks 11. Achieving Supply Chain Excellence in a manufacturing/service organization 1) Supply cosmic string management what? Supply bowed stringed instrument of mountains management (SCM) is the management of a network of inter machine-accessible aires involve in the ultimate provision of harvest-festival and service packages required by end guests (Harland, 1996).Supply Chain Management spans all movement and storage of raw materials, work-in- serve up list, and consummate goods from point of origin to point of consumption ( ply chain). Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both deep refine and among companies.It is said that the ultimate goal of any effective tot up chain management system is to reduce inventory (with the assum ption that ingatheringions are avail sufficient when needed Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both at bottom and among companies. It is said that the ultimate goal of any effective come forth chain management system is to reduce inventory (with the assumption that products are available when needed).As a solution for successful furnish chain management, sophisticated software systems with Web interfacervice for companies who rent their service. Why render chain management The definition, put forward by an Ameri rear end headmaster association, is that Supply Chain Management encompasses the readiness and management of all activities involved in sourcing, procurement, conversion, and logistics management activities. It also includes the crucial comp unity nts of coordination and collaborationism with lineage fellows, which faeces be suppliers, intermediaries, third-party service providers, and guests.In essence, Supply Chain Management amalgamates give and accept management within and across companies. more than recently, the loosely coupled, self-organizing network of businesses that cooperates to provide product and service offerings has been called the Extended Enterprise. 1 Supply Chain Management potbelly also refer to Supply chain management software which are tools or modules used in executing return chain transactions, managing supplier relationships and controlling associated business processes.Supply chain event management (abbreviated as SCEM) is a consideration of all possible occurring events and factors that can cause a din in a bring out chain. With SCEM possible scenarios can be take a shitd and solutions can be planned. functions Supply chain management is a cross-function rise to manage the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and and then the movement of finished goods out of the organization toward the end-consumer.As organizations strive to think on core competencies and be sexual climax to a greater extent flexible, they carry reduced their ownership of raw materials sources and distri furtherion channels. These functions are increasingly being outsourced to former(a) entities that can accomplish the activities pause or more damage effectively. The effect is to increase the snatch of organizations involved in satisfying guest get hold of, date reducing management control of daily logistics operations. Less control and more supply chain partners led to the creation of supply chain management concepts.The purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and improving inventory velocity. som e(prenominal) models have been proposed for understanding the activities required to manage material movements across organisational and functional boundaries. SCOR is a supply chain management model promoted by the Supply Chain Council. An different model is the SCM Model proposed by the globose Supply Chain Forum (GSCF). Supply chain activities can be grouped into strategical, tactical, and useable levels of activities. Strategic Strategic network optimisation, including the number, localisation, and size of warehousing, distribution centers, and facilities Strategic partnership with suppliers, distributors, and customers, creating conversation channels for life-sustaining information and operational proceedss such(prenominal) as cross sorreling, invest deportation, and third-party logistics Product liveliness beat management, so that in advance(p) and existing products can be optimally unified into the supply chain and capacity management Information Technology i nfrastructure, to resist supply chain operations Where-to- found and what-to-make-or-buy decisions Aligning boilersuit organizational dodge with supply dodging Tactical Sourcing contracts and some other purchasing decisions. toil decisions, including contracting, scheduling, and prep process definition. Inventory decisions, including quantity, locating, and quality of inventory. Transportation strategy, including frequency, routes, and contracting. Benchmarking of all operations against competitors and effectuation of best practices finishedout the enterprise.Milest sensation payments Focus on customer fill. operating(a) Daily production and distribution plan, including all nodes in the supply chain. Production scheduling for each(prenominal) manufacturing facility in the supply chain (minute by minute). Demand readying and forecasting, coordinating the conduct forecast of all customers and sacramental manduction the forecast with all suppliers. Sourcing planning, inc luding current inventory and forecast demand, in collaboration with all suppliers. Inbound operations, including transportation from suppliers and receiving inventory. Production operations, including the consumption of materials and flow of finished goods. Outbound operations, including all fulfillment activities, warehousing and transportation to customers. Order promising, beting for all constraints in the supply chain, including all suppliers, manufacturing facilities, distribution centers, and other customers. 2)The Objective of a Supply Chain The objective of every supply chain is to maximize the overall care for generated. The value a supply chain generates is the difference among what the final product is worth to the customer and the labor the supply chain expends in filling the customers request.For to the highest degree commercial supply chains, value exit be strongly correlate with supply chain positivity, the difference in the midst of the revenue generated f rom the customer and the overall court across the supply chain. For example, a customer purchasing a computer from Dell pays $2,000, which represents the revenue the supply chain receives. Dell and other stages of the supply chain incur be to convey information, produce components, trans load center them, transport them, transfer funds, and so on.The difference between the $2,000 that the customer pay and the sum of all costs incurred by the supply chain to produce and distribute the computer represents the supply chain profitability. Supply chain profitability is the total profit to be dole outd across all supply chain stages. The higher(prenominal)(prenominal) the supply chain profitability, the more successful the supply chain. Supply chain success should be measured in terms of supply chain profitability and not in terms of the mesh at an separate stage. Having square upd the success of a supply chain in terms of supply chain rofitability, the next logical maltreat is t o carry for sources of revenue and cost. For any supply chain, thither is only one source of revenue the customer. At Wal-Mart, a customer purchasing detergent is the only one providing positive cash flow for the supply chain. all other cash flows are simply fund exchanges that occur within the supply chain habituated that diametrical stages have different owners. When Wal-Mart pays its supplier, it is f etc.ing a portion of the funds the customer provides and passing that money on to the supplier. wholly flows of information, product, or funds generate costs within the supply chain.Thus, the appropriate management of these flows is a key to supply chain success. Supply chain management involves the management of flows between and among stage sin a supply chain to maximize total supply chain profitability. 3) Decision Phases In a Supply Chain Successful supply chain management requires many decisions relating to the flow of information, product, and funds. These decisions fal l into three categories or phases, depending on the frequency of each decision and the duration frame over which a decision phase has an impact. 1.Supply chain strategy or pattern During this phase, a company decides how to structure the supply chain over the next several eld. It decides what the chains configuration will be, how resources will be allocated, and what processes each stage will perform. Strategic decisions made by companies include the location and capacities of production and store facilities, the products to be manufactured or stored at respective(a) locations, the modes of transportation to be made available along different merchant vessels legs, and the type of information system to be utilized.A firm moldiness go over that the supply chain configuration supports its strategic objectives during this phase. Dells decisions regarding the location and capacity of its manufacturing facilities, warehouses, and supply courses are all supply chain convention or s trategic decisions. Supply chain design decisions are typically made for the long term (a matter of years) and are very big-ticket(prenominal) to alter on short notice. Consequently, when companies make these decisions, they must take into account uncertainty in anticipated market conditions over the next some years. 2. Supply chain planning For decisions made during his phase, the time frame considered is a quarter to a year. in that respectfore, the supply chains configuration located in the strategic phase is fixed. The configuration establishes constraints within which planning must be done. Companies start the planning phase with a forecast for the coming year (or a comparable time frame) of demand in different markets. Planning includes decisions regarding which markets will be supplied from which locations, the subcontracting of manufacturing, the inventory policies to be followed, and the timing and size of marketing promotions.Dells decisions regarding markets a given p roduction facility will supply and target production quantities at different locations are sort as planning decisions. Planning establishes parameters within which a supply chain will function over a specified period of time. In the planning phase, companies must include uncertainty in demand, exchange rates, and contention over this time horizon in their decisions. Given a shorter time horizon and better forecasts than the design phase, companies in the planning phase try to incorporate any flexibility built into the supply chain in the design phase and exploit it to optimize deed.As a result of the planning phase, companies define a situate of operating policies that govern short-term operations. 3. Supply chain operation The time horizon here is weekly or daily, and during this phase companies make decisions regarding individual customer orders. At the operational level, supply chain configuration is considered fixed and planning policies are already defined. The goal of suppl y chain operations is to handle incoming customer orders in the best possible manner.During this phase, firms allocate inventory or production to individual orders, set a date that an order is to be filled, generate calve lists at a warehouse, allocate an order to a particular transportation system mode and shipment, set delivery schedules of trucks, and place replenishment orders. Because operational decisions are being made in the short term (minutes, hours, or days), in that location is less uncertainty about demand information. Given the constraints set up by the configuration and planning policies, the goal during the operation phase is to exploit the diminution of uncertainty and optimize mechanismation.The design, planning, and operation of a supply chain have a strong impact on overall profitability and success. proceed with our example, consider Dell Computer. In the early 1990s, Dell management began to focus on improving the improved performance. Both profitabilit y and the stock footing have soared and Dell stock has had outstanding returns over this period. 4)Supply Chain Process Platform The winners in fiercely competitive markets create agile and in force(p) business processes, supported by flexible, reliable and cost-effective technology.When your market postal service depends on your supply chain, you need processes and solutions that work together seamlessly to provide the information and automate the activities you need to operate about effectively. All of Manhattan Associates solutions operate on a crude Service Oriented Architecture (SOA) platform, to maximize the value of your technology investment. With Manhattan Associates Supply Chain Process Platform, you can easily integrate any or all of our applications into your existing systems or add new solutions from our suite of products.That mode dramatic reductions in complexity and faster effectuation whenever you need new functionality. With shared master and transaction en tropybases, data secure management (such as voice and RFID) and a real time terrific system that operates across all Manhattan Associates solutions, the Supply Chain Process Platform provides a safeguard that flags any inconsistency in your data, ensuring a safe writ of act and continued smooth operation. Our Supply Chain Process Platform offers flexibility, scalability and supportability to decent the requirements of the most complex supply chains for the most demanding companies.The Manhattan Supply Chain Process Platform Makes customizing your solutions to meet your business requirements easier than ever Simplifies adding new functionalities or incorporating technical innovations Provides a shared platform for collecting, managing, distributing and acting on information and events that flow finished the supply chain Ensures that solutions are robust, scalable, resilient and agreeable across all components. Uniting the Platform Applications for Maximum ValueThe Supply Chain Process Platform provides a foundation for all Manhattan platform applications Supply Chain Intelligence With easy-to-read reports presenting powerful analytics, you can monitor the performance of your suppliers, carriers, customers and employees from one intuitive dashboard. Supply Chain Visibility See a single, consistent, real time view of your entire global supply chain. Supply Chain return Management Receive notification of all supply chain events as they occur and respond immediately across your full supply chain. 5) Supply Chain doing Achieving Strategic Fit Competitive strategy defines the set of customer needs a firm noticeks to satisfy through its products and service ? Product development strategy specifies the portfolio of new products that the company will try to develop ? Marketing and sales strategy specifies how the market will be segmented and product positioned, priced, and promoted ? Supply chain strategy assigns the nature of material procurement, transpo rtation of materials, manufacture of product or creation of service, distribution of product Consistency and support between supply chain strategy, competitive strategy, and other functional strategies is importantAchieving Strategic Fit(1/2) ? How is strategic fit achieved? ? new(prenominal) issues affecting strategic fit How is Strategic Fit Achieved? ? Step 1 Understanding the customer and supply chain uncertainty ? Step 2 Understanding the supply chain ? Step 3 Achieving strategic fit Step 1 Understanding the Customer and Supply Chain Uncertainty (1/3) ? Identify the needs of the customer segment being served ? Quantity of product needed in each lot ? Response time customers will tolerate ? contour of products needed ? Service level required ? Price of the product ? sought after rate of innovation in the product Overall attribute of customer demand ? Demand uncertainty uncertainty of customer demand for a product ? Implied demand uncertainty resulting uncertainty for the supp ly chain given the portion of the demand the supply chain must handle and attributes the customer desires ? Implied demand uncertainty also related to customer needs and product attributes ? First mensuration to strategic fit is to understand customers by mathematical function their demand on the implied uncertainty spectrum Step 2 Understanding the Supply Chain (1/2) ? How does the firm best meet demand? ? Dimension describing the supply chain is supply chain responsiveness Supply chain responsiveness ability to respond to wide ranges of quantities demanded meet short lead generation handle a galactic variety of products build highly innovative products meet a very high service level ? There is a cost to achieving responsiveness ? Supply chain cogency cost of making and delivering the product to the customer ? Increasing responsiveness results in higher costs that lower efficiency ? Figure 2. 3 cost-responsiveness expeditious border ? Figure 2. 4 supply chain responsiveness spectrum ? Second step to achieving strategic fit is to map the supply chain on the responsiveness spectrumStep 3 Achieving Strategic Fit ? Step is to ensure that what the supply chain does well is consistent with target customers needs Other Issues Affecting Strategic Fit ?Multiple products and customer segments ? Product life cycle ? Competitive changes over time 6)Drivers of Supply Chain Performance Supply chains are becoming increasingly global and ever more complex, as organizations try to support strategic management practices such as entering new markets, increasing the pace of new product introductions, improving the reliability and induce of order fulfillment . . . all the temporary hookup trying to lower supply chain costs.For organizations to work boneyly with their suppliers, logistics providers, distributors and retailers, their supply chains must be streamlined and technology-enabled. However, organizations that want to streamline their supply chains must first und erstand what is working well, what is not and where the opportunities for improvement are. These companies need to have a way to measure the performance of their supply chain on an ongoing fanny. Traditional approaches of measuring supply chain performance scorecards, dashboards and reports showing supply chain poetic rhythm suffer from three shortcomings 1) They are not associate to strategy. ) They have a silo approach. 3) They have a prone hierarchy. Lets examine each of these shortcomings more closely. They are not linked to strategy. It can be trying to see how a supply chain metric affects your overall objectives. If the metric is reduceing in the wrong direction, which aspect of your supply chain strategy will be affected? Without a poser that links each metric to a certain element of strategy, the condition behind a metric can get lost. When such scope is missing, it plows a challenge for organizations (large ones in particular) to get everyone to see the common vision.Next-generation Supply Chain Performance Management (SCPM) systems will need to be able to show the link between any metric and the element of strategy it impacts. They have a silo approach. Current supply chain analytics solutions do a good job of showing the performance of rhythmic pattern for individual departments, such as cost per unit purchased, percentage of on-time supplier shipment for the procurement department, or set-up times, capacity utilization and percentage of scrap for the plant.However, this type of silo approach sacrifices the overall process and end goals in the interest of improving the performance of an individual department. As a result, functional silos are reinforced within the organization. The key is to measure the performance of overall business process in such a way that poor performance of a departmental metric could be overlooked in the interest of increasing the overall business process performance. To achieve this, next-generation Supply Ch ain Performance Management systems will need to do more than show departmental metrics they need to have a process orientation. They have a flat hierarchy.The metrics that help you measure the overall performance of your supply chain are not standalone they are related to each other, sometimes in a hierarchical fashion. Such relationships help you drill agglomerate and better understand root cause more effectively. For example, if a hierarchical relationship were developed between outbound shipment cost metric and those metrics that affect shipment costs, your system will tell you that outbound shipment costs are trending up despite the carrier rates trending down due to lower fuel costs, because your express freight shipments in a certain division are up significantly month over month.However, most current supply chain analytics have no way to define such relationships. Next-generation Supply Chain Performance Management systems of tomorrow will need to be able to define and sho w relationships between metrics. What supply chain performance management systems must include All these issues need to be addressed by next-generation Supply Chain Performance Management systems. Such systems should include three capabilities an analytics model a process orientation and linkages. Analytics framework.The ideal SCPM system should allow a user to define a complete framework for supply chain analytics. This framework should include overall supply chain objectives the top-line metrics that affect the objective the description, targets and gratifying range for each metric and a list of reports where the metric can be found. 7. Designing the Supply Chain Network Overview In at presents volatile business environment, many companies are expanding, merging, contracting, or other redesigning their supply chain networks.Here learner applications of optimization models to the analysis of these network design problems. Modeling concepts are reviewed as well as practical meth ods for data gathering and validation, model implementation, and scenario construction. New applications will be presented including network design models to plan for new products, to manage production and inventories of products with short shelf lives, to take on vender contracts, and to control CO2 emissions. Several oddball studies will be presented along with discussions of network design problems faced by course attendees.Who Should control This program is intended for Managers and analysts responsible for network design decision-making Managers and analysts responsible for getting or developing, and applying data-driven simulation systems to support network design decision-making Consultants who direct or enroll in network design studies Academics who teach supply chain subjects to students in management and engineering Participants will not need go on analytical skills to fully absorb material presented in the program. )DEMAND AND SUPPLY supplying IN SCM SCM facechall enges to people at manufacturing companies who need to gauge customer demand and respond to changes in demand, even when they take place at a moments notice. Manufacturers responsiveness and agility in the areas of sales and operations planning (SOP) and demand managementthe two major parts of supply chain planningare pacify hampered by cumbersome, static processes. Common problems include need of real-time, robust, and actionable data. Lack of integration among financial, operating, sales, and marketing plans. Inability of people to share information and documents. Poor analytical capabilities and collaborative planning environments. Lack of alert and observe capabilities. Solutions Supply Chain Demand and Supply Planning solutions from Microsoft and its partner ecosystem help manufacturers change the way they manage their supply chains to become more demand-driven, adaptive, and responsive.By improving peoples visibility into customer demand and supplier capabilities, these sol utions create an environment that enables real-time decisions about manufacturing activity, which can lower inventory while improving customer service. Demand management solutions offer real-time demand management business processes, delivered with an integrated business intelligence and collaboration framework, to put people with collaboration and analytic capabilities.Sales and operations planning (S&OP) solutions, which include connected systems, process workflows, event management, and live communication, offer collaboration, analysis, integration, workflow, and monitoring functionality throughout all phases of a manufacturers SOP workflowbeginning with the baseline forecast created by people in the manufacturers sales and marketing departments, all the way through the forecast for a specific customer, the creation of a consensus forecast, supply planning, dissolvent and censure processes, approval and budgeting, sales allocations, order promising, and communication with the manufacturers production facilities. Infor Supply Chain Management is a global solution with implementations at over 1,600 customer sites in 40 countries. Backed by domain experts who know supply chain management and the challenges you face, our supply chain planning and execution solutions comprise the following key components Strategic Network Design modeling and optimization tools for determining the most effective number, location, size, and capacity of facilities to meet customer service goals time-phased tactical planning for determining where and when to make, buy, store, and move product through the network.Demand Planning forecasting tools, web-based collaboration interface, and sales and operations reporting and metrics that help companies predict and shape customer demand with greater accuracy. statistical distribution Planning inventory analysis and time-variable stock target calculations for ensuring the optimal oddment between service levels and inventory investment s ynchronized replenishment plans for all network points right stake to manufacturing and supplier sources for better visibility. Manufacturing Planning constraint-based travel planning system for engineering, assembly, and repetitive manufacturing environments similar tools for process manufacturers. Production programming finite capacity scheduling for engineering, assembly, and repetitive environments, as well as batch-process production facilities.Transportation and Logistics Planning transportation planning, transportation procurement, route planning, transportation management, littler parcel shipping, and international trade logistics for global, multi-modal operations. Warehouse Management System throughout fulfillment and distribution including inventory, labor, and work and task management, as well as cross-docking, value-added work, yard management, eightfold inventory ownership and billing/invoicing, and voice-directed distribution. RFID world-wide RFID-enablement fr amework delivering business value through process optimization for manufacturers and other companies, as well as compliance solutions for retail, pharmaceuticals, the US Department of Defense, and others.Event Management proactive, real-time exception management technology for detecting conditional change anywhere in the supply chain and communicating it instantly for resolution. 9)Planning and managing inventory By Curt Barry Inventory is most likely the largest balance sheet plus in your company. How well you plan, purchase, and manage your inventory largely determines your level of customer service and profits. merely selling goods in multiple channels means dealing with channel-specific planning and inventory needs. Planning and inventory systems In most companies, the systems for merchandise planning and inventory control remain highly split up by channel.For promotional planning, many multichannel companies need to be more patient and use a single promotional calendar rat her than channel-specific schedules on which merchandise planning is based. These should include in-store promotions, catalogs, and netmail campaigns. Internet inventory management philosophies are slowly evolving in most companies. Traditional catalogers now mediocre more than 50% of sales from the Internet, although more of that business is generated by know of the catalog. Products whitethorn be active and available longer if there is stock. What sells online is to a great extent influenced by placement on landing pages and organization and ranking within category product searches.The online product assortment can be more extensive than that in a single catalog. Internet may have a total chain assortment different from any one store or region. The Website may have a kick the bucketance or small town aspect. These principles of planning and managing inventory are not industry established best practices, but are being hammered out in the trenches every day. From a purchasin g perspective, companies are rolling multiple channel plans and forecasts together into a single purchase order management system to write Pos. When will there be true integrated systems for planning and inventory systems? For most companies, not any time soon. Retail and direct channels have different data needs and processes.It will belike be a few years before commercial software companies that cater to retail and direct have the most basic of systems in place. MICROS Retail, Direct Tech, and Manhattan Associates all have development projects to bring channels together in terms of planning and inventory systems. Channel Inventory a distribution view With all the complexities of planning and inventory control, how are distribution centers accommodating the channels? When multichannel marketing was in its infancy more than a decade ago, the prevalent thinking was to have a single DC that would process both direct and retail replenishment orders. There would be one pooled inventor y, one staff and one facility end of discussion. But logistics thinking is ever-changing.But to accomplish this, they have the additional overhead of multiple facilities and staffing, and their warehouse management and order management must be capable of managing multiple inventories and allocating and filling orders. As e-commerce in retail companies has large(p) substantially, logistics management has come to realize that picking, packing, and shipping of small orders is very different from full-carton replenishment to stores. With large volumes it may prove to be more efficient to have commit centers for direct. Another of the real drivers behind this shift is the realization that without having separate sales and stock plans, there is no accountability by business units to make their sales plans.So if the first unit to allocate inventory gets the stock, then there may not be inventory for later drops of a catalog, e-mail campaigns, initial stocks to open stores, etc. Other co mpanies use a realistic inventory concept, not in the sense of drop-shipping, but of the inventory system being able to keep planned sales by product and SKU by channel, and being able to reserve inventory for the channel business unit. Importings effect Where we source product is also changing how we can plan and manage it. Much of the multichannel world relies on merchandise product. Even if you buy from a domestic distributor, chances are that merchandise is imported.Additionally, companies may not be looking at a fully steady product cost including agents/brokers fees, demurrage, duty rate, product development costs, and buyers travel. Couple that with warehouse storage space requirements for container size receipts and the inventory carrying costs. All of this leads to higher inventory and carrying costs and slower turnover. What to do about it? Use mixed container loading, where appropriate. Weigh the increase in per unit cost to take smaller quantities. Move the entire me rchandise and creative planning calendar for promotions rear end and do each season earlier (no easy task). Challenge merchants to look Stateside to try to get the product with smaller quantities, or to develop product in the U. S. and later roll it out off-shore if it sells. Tackle the issue of ccounting for all the product costs to be sure you have an accurate, fully flush cost and sufficient initial markup without being overstocked. Liquidating overstocks Inventory that doesnt sell and excreting are two dreaded aspects to merchandising. Because you have to take in bigger imported orders and distribute to more channels, you need a cost effective strategy for in-season liquidation and clearance. In a cost-based system its hard to determine how much gross margin is lost in marking down retail prices. Our experience is that it may represent 2% to 4% of net sales at least. What to do about it? Develop a liquidation strategy. Options include clearance catalogs, Web specials, bind-in or package inserts, sales pages, and prognosticate offers. Develop a report showing candidates for liquidation based on rate of sale. Develop an age of inventory report that will age products in time brackets (30 days, etc. ) to stay on top of inventory. transportation, importing, retail versus direct packaging, technology used in the supply chain and DCs, etc. All this necessitates setting standards with vendors so that you arent working on an exception basis with every one. Vendor compliance and supply chain In most multichannel businesses the size of the product assortment and vendor base have grown dramatically. Supply chains have become increasingly complex with modes of vendor compliance is at the heart of efficient supply chain management.Routing inbound shipments to reduce costs and scheduling inbound appointments can help speed product flow through the DC, significantly helping in turn to reduce inventory levels. Automating the supply chain through advanced shipping noti fications (ASNs), RFID, and cross-docking to stores can go a long way toward reducing costs, but these cannot be implemented without a comprehensive vendor compliance policy. sire small by communicating your company vision, the need for on-time delivery, routing guides, inbound dock standards like carton labeling, product specifications, accounting and paperwork requirements, contact list, and the costs of back orders. Begin a charge-back policy and implement it with your largest vendors.Later, you can add other items that are typically include, such as service level standards, packaging, labeling, case labeling, valued and value-added services, logistical requirements, scheduling appointments, cross-docking and direct-to-store requirements, charge back for non-compliance, etc. The trend is to push compliance back up the supply chain. This means as many value-added services as possible packaging, marking, quality inspections performed by vendors or merchant reps in factories. Cat ching errors at the source and using source-based services speeds inventory flow, and any such issues are cheaper to deal with in the vendors environment. 10)ACHIEVING SCM excellence A new survey reveals what separates manufacturing industry leaders from laggards IT HAS BEEN several years since a comprehensive and independent survey of the state of supply chain management (SCM) in the paper manufacturing industry has been carried out.A lot has happened both in the industry and in the field of SCM during this time. Moderator Consulting carried out an extensive survey during July-October 2005 to see where we stand today. Altogether 11 European paper companies participated in the survey, which cover issues such as SCM strategy, process and management models, reporting systems, managing customer relationships, efficient operations, people and supporting systems and emerging plans. The respondents covered all the main product groups in nine European countries. The results of individual companies were obviously kept purely confidential. Common terminology and definitions were used in the survey to ensure common understanding of the questions and issues.The results provide a good cross-section of the industry performance and challenges. Besides being a major cost and working hood factor, SCM can also be considered a source of significant competitive edge. Some of the findings are listed below. 1. Nearly half the respondents still need to develop more robust SCM strategies. While all companies said they have an SCM strategy, the content, communication and integration into overall business strategy in many cases leaves much to be desired. For instance, some companies had no logistics provider strategy or did not include development of cost factors. 2. The industry has clearly been moving toward a more integrated management structure.Most SCM-related decisions, such as strategy, demand planning and vendor and location management are present tense made at corporate / business area levels, with sales companies and mills mostly in an execution role (Figure 1). However, even though management structures are more integrated, several companies have yet to adopt more of a process approach, with the processes and their ownerships defined. Systems for monitoring key performance indicators (KPIs) seem nowadays to be at a reasonably good level in nearly all the respondent companies. 3. The outsourcing process appears to be complete. The dominant logistics management mode is nowadays clearly preferred partnerships on average 60%, and covering the whole infrastructure.Interestingly although preferred partnerships was stated as the dominant transport mode, respondents still had between 50 and 100 regular haulage partners in use on average. This may indicate room for some further consolidation. IT systems management is the exception to the outsourcing rule very few companies have outsourced this aspect of their operations. 4. Many companies still need to s egment their customers and define corresponding service levels for each customer or customer group. This may mean that these companies are offering the alike(p) service, such as dedicated stocks or a 24 hr/ single pallet delivery with corresponding costs to all or most of their customers.This can hardly be optimal from a cost-to-serve viewpoint, unless price supplements are enforced. However, customers rarely accept such surcharges nowadays. 5. Surprisingly few customers participate in the demand planning processes (only five to 10 on average). exponentiation in this context means active involvement and, considering the industrys forecasting challenges this may offer an improvement in some industry segments. Transaction mechanization with customers and logistics providers also offers big potential only 10-20% and 50% respectively said they currently transact electronically. More standardization is needed. 6. Most companies seem sooner satisfied with their IT systems.On a scale of one (very dissatisfied) to five (very satisfied), a clear majority of the companies gave a mark of four for most of their systems, such as mill execution, sales and distribution and data warehousing. The substantial investments in IT systems over recent years appear to have paid off in a number of cases. 7. Most companies were satisfied with both the number and eager of their SCM personnel. Main training requirements were focused on customer relations issues. 8. upcoming development needs to be carefully planned. As generic future goals, most respondents stated that their main focuses are on cost and inventory reductions, as well as on improving customer service. modify internal integration and process management was also listed as a priority generic target.However, these may be conflicting targets, unless planned carefully. More specifically, the respondents were asked to prioritize a list of 14 specific SCM initiatives provided, based on their planned implementation in the n ext three years initiatives included issues such as RFID, vendor managed inventory (VMI), activity based costing, harmonisation of IT infrastructure, e-commmerce with logistics providers and offering outsourcing capabilities to customers. The clear winners were VMI, e-commerce projects and collaborative planning, forecasting and replenishment (CPFR) following close behind. These are huge undertakings with significant risks, resource and planning requirements.However, the companies that successfully implement them would take their supply chain to an entirely new level of sophistication, responsiveness, efficiency and transparency. Finally,The industry has been moving toward a more integrated and customer-centric management approach. fabrication and customer consolidation are the most likely reasons for this. IT systems and performance monitoring finally appear to be in good shape in most companies. This is a good basis for future development, even though many companies revealed some worrying weaknesses in a number of critical areas and are clearly lagging behind the leaders. The leading companies based on this survey can best be characterized as having a clear, comprehensive and well-communicated SCM strategy.They also have an integrated management structure and KPI monitoring in place processes are defined in detail service/cost tradeoffs are optimized logistics partners are managed efficiently they have implemented wellfunctioning IT systems and have efficient and well trained people, all of which are reflected also in their costs and performance. Is this just good, basic management? Easy to say, much more difficult to accomplish in real life Furthermore, the leaders have challenging plans for the future especially in areas involving their customers. These companies are clearly outperforming their peers and they are well positioned to increase their competitive edge by efficiently and intelligently part their customers.