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Becoming the next generation of supply chain leaders means challenging conventional methods, extracting value from networks, and planning for uncertainty
Manage your Supply Chain Capacity while planning for the future
Recent Challenges to Supply Chains
Global Competition, Consumer Expectations and Economic Recovery
Based on our research, companies are shifting priorities because supply chains will face more complex environments, global competition and higher exceptions. Below is a list of the external challenges that supply chain networks will need to address over the next 5 years. These external challenges, including global competition, consumer expectations and economic recovery, are driving companies to make new investments to optimize their supply chain strategy and networks capabilities.
- Increased volatility in demand
- Higher customer expectations
- Increased cost pressures
- Increase global competition
- Increased volatility of commodities prices
- Higher complexity of demand patterns
- Expanding global labor markets
- Regulation changes
Priorities of supply chain executives have also shifted. Reducing operating costs still remains as the top priority of many companies but it has lost ground to customer services, speedy delivery, and improving products or services. The major culprit that has effected these priorities a shift consumer buying behavior. Online purchasing is steadily increasing while traditional retail stores see lower revenue. Some companies have done better than others. Amazon has created an impressive supply chain network while companies such as best buy have struggled to maintain profitability. Shifting supply chain strategies has become a must in today’s environment and executives have taken notice.
- Reducing operating costs
- Improving customer service
- Getting products or services to market faster
- Improving the quality of products or services
- Reducing risk
- Reducing capital costs
- Reducing overall inventory levels
- Reducing carbon footprint and creating a green supply chain
*Reducing risk has increased moderately while reducing capital costs has declined significantly. Creating a green supply chain has significantly increased but remains a very low priority for most companies
Leveraging your Supply Chain Data
Our Advanced analytical models can maximize your profits in uncertain conditions without any doubt of the level of production and inventory you need. Your supply chain data can be used to help optimize pricing, inventory, marketing and logistics. We will calculate the probability of selling your products at a certain price level, find your optimal price level, choose how much to produce and when to produce your products all with the intention of maximizing your profits. There is no need to be uncertain about your business decisions with uncertain demand and our management consultants will be happy to work with you to transition your company into a model of operational excellence.
Evaluating Logistics from Top to Bottom
Too many companies focus just on reducing costs in their supply chain by trying to negotiate lower costs with suppliers. Negotiation will always have a place in supply chain management however when buyers ask their suppliers for lowered costs, they are really attempting to shift costs down the supply chain and not increasing the supply chain’s value.
There is significant value that can be created through a comprehensive evaluation and cooperation within a supply chain network. Shifting costs is not the win-win situation most people talk about but their are win-win situations at many levels of the supply chain which can be leveraged to increase value.
Consultants in supply chain management, as well as financial analyst and executives, are seeing significant signs that supply chains will be the future source of competitive advantages. Online consumer purchasing has grown significantly and is becoming a larger percentage of total sales. Amazon’s logistics has forced retailers to develop strategies to compete. But how is this done? Many companies now are exploring Omni-channel retail strategies. Supply chain’s needs to match customer behavior and provide nimble operations and flexibility.
Negotiations will always have a place in management however it shouldn’t be the only focus for cost reductions.
Increasing Revenue and Reducing Costs with Advanced Analytics
In most cases, improving the effectiveness of supply chains involves changing a company’s relationships with its suppliers. A top to bottom approach can have significant cost savings for the supply chain as a whole however not all suppliers are prepared to listen. Companies that want a greater commitment from their customers, has led companies to integrate closer with their suppliers and to vertical align.
A business’s supply chain can be a source of competitive advantage and a way to generate growth. Supply chain management principles can effectively increase profits by optimizing the links in your supply chain. At Operation Consulting Group, We use advance data analytical models as well as qualitative assessments to deliver your company the insights needed for sound business decisions.
“Operation Consulting Group helps companies become a leaders in supply chain management through insights and industry experience.”
Investment in your supply chain will add value by increasing the efficiency and effectiveness of your organization. Supply chain management consultants will focus on all aspects of your supply chain to increase its value, competitiveness, and operational effectiveness that can impact your total operating expenses. Our Supply Chain Consultants will use advanced data analytical models and qualitative assessments to identify the best opportunities for improving your supply chain.
Too often when companies assess their supply chain, management is often disappointed with the results. Operating expenses are a component of EBITDA and reducing such costs throughout the supply chain will greatly impact firm value. Economic volatility, increasing complexity and shorter product cycle times are pushing organizations to create supply chains that can continuously adapt to changing environments.
Operation Consulting Group will help you track key performance metrics, segment your customers and products and improve operations throughout your organization. We will be able to measure the potential impact of improving your supply chain and discover areas of opportunity where you will receive the highest ROI.
Questions we can answer:
How many distribution centers do I need and where should they be located?
What supply chain strategy is the best fit for the future?
Historical Overview of Supply Chain Management
The evolution of supply chain management has had six major movements starting with its first appearance in 1982 when Keith Oliver coined the term during an interview with Financial Times. Although the term look almost a decade to become seen in various books and articles a major tipping point for supply chain management came much earlier with the invention of the assembly line. This manufacturing process allowed a company to produce products in much larger quantities than previously believed possible. The benefits were apparent and supply chain management, although not coined at the time, became a source competitive advantage and organizational growth.
In the 1960’s electronic data systems accompanied with enterprise resource planning lead to better integration capabilities. The various links in a organizations supply chain was never looked at as a whole to such an extend. Communication and collaboration became the norm and a fragmented system started to consolidate by the 1980’s.
By the 1990’s functional integration and the development of logistics led to an even more prevalent study. With the integration of information technology, marketing, and strategic planning, Supply Chain management become an important field of study because of the cost benefits associated numerous examples of operational excellence. By the 2000’s supply chain management could capture significant value for many large corporations.
Operation Consulting Group is a heavy analytical supply chain management consulting firm. We specialize in healthcare operations, manufacturing, procurement, retail operations, logistics and distribution. Our fact based approach has proven to be successful for numerous clients wanting to increase profits through operational improvements. Their are many benefits to hiring a management consultant or traditional hiring and we will be happy to work with you and your company to accomplish difficult tasks.