Gartner The Price of Mis-aligning Supply-Chain and Plant Performance
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The Price of Mis-aligning Supply-Chain and Plant Performance

Companies can meet the challenge of ever-growing complexity in their global operations by synching their plant and supply-chain processes. Eric Green, vice president of solution strategy with Apriso, shows how.

Among the factors impacting manufacturers today is rapid geographic growth, due to the global expansion of supply chains, Green says. At the same time, they are coping with the proliferation of products, geared toward increasing consumer demand. Additional complications include the need to navigate across multiple time zones, languages and currencies. "When companies try to serve a regional market," Green says, "they have to deal with different challenges to serve local customers."

They are encountering more complexity every day. Historically, successful manufacturing models were judged on their ability to build to stock and "stuff shelves." That approach is cost-prohibitive today. "Manufacturers have to be more lean," says Green. "Supply chains have to be more synchronized."

Alignment begins with a good manufacturing strategy. Companies must determine whether they are oriented toward brand management, direct manufacturing, or the outsourcing of key functions. All departments with the organization, from engineering to customer service, as well as outside partners, must be attuned to the same metrics, "to meet the ultimate goal of the perfect order."

Nevertheless, many companies still suffer from a misalignment of incentives within their manufacturing and supply-chain organizations. Green has seen some improvement in that area, but businesses have a long way to go before taking full advantage of the technique, he says.

A common sent of metrics ensures that "everyone has an understanding of the definition of what they have to perform against." Also key is visibility across the supply chain, supported by rapid access to real-time data.

That last capability "is one of biggest challenges in organizations," Green says. "People are still grappling with data definitions and the commonality of data infrastructure." The goal, he added, is to "make sure that all have same meaning to every individual."

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Keywords: supply chain, supply chain management, inventory management, inventory control, logistics management, supply chain planning, retail supply chain

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