A few decades ago, Vendor Managed Inventory (VMI) was a hot topic. Many manufacturers saw it as a way to reduce inventory levels and costs. If they could get their suppliers to maintain ownership of raw materials or subcontracted components until consumed, inventory levels would naturally drop—on paper anyway. Because they were giving most, or all of their business to one supplier, they were also in a position to negotiate
In 2010, Gartner estimated that manufacturers outsourced about 70% of the products they make to other manufacturers. I haven’t seen a recent statistic, but that still feels about right. So, it only makes sense that, for most manufacturers, implementing modern demand-driven or pull-manufacturing techniques will require collaboration with many partners across the entire supply chain. Before you can collaborate with your supply chain partners, you need to get your own
End-to-end Visibility for Real-time Coordination, Communication, and Commitment By applying demand-driven methods and synchronizing processes, manufacturers are reaching new levels of communication, profitability, and customer responsiveness. Demand-Driven Manufacturing incorporates the best of Lean manufacturing, Theory of Constraints (TOC), and Lean Six Sigma principles. In demand-driven environments, production is based on actual customer demand, with everything synchronized (people, processes, materials, machines, and information) to drive flow. The process is accelerated by
Visibility Matters. Rick Morris, a Certified Supply Chain Professional wrote in Supply House Times that while improving fill rates, improved forecast accuracy also lowers inventory levels measured in days of sales; and simultaneously, improved forecast accuracy improves fill rates and lowers inventory. He suggested this translates into increased profitability. When analysts have studied companies that were best-in-class in demand forecasting, they found these companies averaged (according to Advanced Market Research)
In the second part of our three part series on successful implementation strategies, we discuss one of the most important project setup strategies – the RACI. Part Two- The RACI As I’ve mentioned before, implementation projects end up being mostly about the people involved. Project success hinges upon how effective the project team is in harnessing their own particular talents and in placing the right eyes over the right set
Logistics planning to enable project relationships – practical directives from an industry veteran. Part One: Love Your Logistics At the end of the day, implementation projects end up being about people—their skills, styles, and investment in the project and the project’s success. As you may well imagine, there are quite a few ways to set up effective relationships. For me, these fall into three categories: Project documentation; communication: and logistics.