In her second installment on supply chain performance, Alexander Proudfoot Global Supply Chain Lead, Jaymie Forrest focuses on seven ways to improve working capital. They are as follows:
- Reduce cycle time -- Certain areas of the supply chain have the potential for cycle time improvement. It is imperative for executives to understand the proper mix of transport routes, terminals and modes around the global supply network in order for this to happen.
- Optimize manufacturing plans -- In most cases, there is potential for extra manufacturing capacity and opportunities to reconfigure inventories based on current trends. Proficient sales and operations planning is an essential part of this process.
- Improve sales and operations planning -- Understanding demand and planning is the key to managing variablility. Retrofitting the supply chain to be more responsive to changes in the S&OP process is one way to develop a competitive advantage without incurring additional operating costs.
- Integrate sourcing and procurement -- A close working relationship between procurement and the supply chain can identify high costs and slow cycle times that are affecting the bottom line. Companies can then develop beneficial policies and processes that counteract these issues.
- Improve asset utilization -- There are many operational decisions that can improve asset utilization, namely how orders are grouped, planned and prepared.
- Evaluate operating strategies -- Effective supply chain planning requires a strategy that can adapt to evolving corporate initiatives. It must also anticipate future market growth and change, as well as new channels to market.
- Balancing transportation costs and inventory -- What is considered an optimum size order from the point of view of the manufacturer or warehouse may not be ideal for the customer. However, this is often negotiated to provide the best cost benefit for both parties.
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To read Jaymie's first article on supply chain performance, click here.
To find out which industries are leading the way in supply chain improvement initiatives, click here.
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