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Supply Chain Management: The Chain Effect

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Saturday, March 17, 2007

Areas of Concern

Data transparency across the SCM chain: Data available from different stakeholders should be clear and easy to understand and able to recognize different business patterns clearly. Overall, data transparency can be enabled by EPC Info Exchange and other protocols, adoption of GTIN and other standards, in transit visibility during collection and distribution, pallet/ case/ item level tracking and through seamless information exchange between various stakeholders.
Real time information across the SCM chain: Systems should be able to track and use new information immediately after an event (real-time) and influence the decisions of the concerned people. An efficient supply chain is nimble and responsive to shifts in demand or constraints.
Extension of value of information/data generated: The real value of the immense data generated throughout the supply chain can be realized by the sharing of information between various entities to improve overall efficiency.
Collaboration of relevant data between stakeholders: Sharing of forecasts and related business information among business partners enable high product availability. Collaboration results in better cross docking, less product returns, reduction in reverse logistics, B2B integration and providing manufacturers / vendors with valuable customer information for use in fine-tuning their marketing efforts.
Inventory and replenishment: With proper inventory planning, potential stock-outs can be detected and replenishment requested before the inventory drops to critical levels. It encompasses the following components: efficiency in key business ratios, out of stocks, inventory obsolescence / shrink, automatic inventory counts, demand planning to reduce unsaleables and out-of-stocks, and inventory rotation.
Flexibility to dynamically adapt to new business rules: An enterprise whose business processes are integrated end-to-end across the company and with key partners, can rapidly adapt to changing market conditions, and changing market needs and fluctuations.
Financial Efficiency: Financial efficiency when enabled can ensure accurate billings, efficient utilization of human resources, paperless audit trails, financial reporting accuracy across the chain, lean operations and increased invoice accuracy across the chain. On the other hand, the impact areas for security include theft prevention, tracking of individual items, access control and data encryption.

Benefits of SCM

Real time Information

Building an accurate, up-to-date inventory picture thereby maximizing visibility is vital to supply chain planning. RFID enables systems to track and use new information immediately after an event (real time) and influence the decisions of the concerned people. The key success factors after using RFID are single point web enabled data access, multi stores visibility, monitor perishable goods.

Inventory and replenishment

Some of the key success factors after using RFID include maintaining a real-time view of inventory as it flows through the supply chain, tracking of discrete movement of inventory, triggering of alerts around inventory movement based on pre-defined/customized business rules and allowing just-in-time practices.

Maximizing warehouse space

With high costs associated with the storage real estate, the goal is to maximize warehouse space. This will improve utilization without undermining the ease with which goods can be moved in and out.

Minimizing goods shrinkage

Theft combined with imprecise inventory management can create a significant shortfall in actual versus expected goods available. Within the supply chain environment, goods shrinkage is widely perceived to account for up to one per cent of stock, affecting a significant dent in profits.

In terms of benefits to consumers, RFID can go beyond just intangible cost savings, as it can play a role in food safety, counterfeit control, and warranty programs.

Adieu Supply Blues
Imagine a fully responsive SCM network. Imagine a warehouse where perishables don't perish, where theft is fully detectable and prevented where your systems exactly match physical inventory counts, and where transactions with trading partners are automated and precise.

Imagine product visibility, transparency and a supply chain built on real-time demand and supply information � imagine the impact on your inventory and working capital.

In terms of benefits to consumers, RFID can go beyond just intangible cost savings. It can play a role in food safety, counterfeit control, and warranty programs

Recollect the impact of the bar code some 25 years ago, and now, imagine the impact of latest RFID technologies today.

RFID represents a truly transformational technology that provides the ability to revolutionize the face of the supply chain, retail operations and consumer-centric processes. It has the potential to drive enormous shareholder return benefits across numerous key metrics including revenue growth, operating margin, working capital and capital expenditures.

Just imagine the possibilities ...

Homi Limbuwala
The author is VP, business development, SkandSoft Technologies

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