• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • Login
  • Subscribe
  • Logout
  • My Profile

  • CORONAVIRUS
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • REGIONS
    • Asia Pacific
    • Canada
    • China
    • Europe
    • Latin America
    • Middle East/Africa
    • North America
  • THINK TANK
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Making the Supply Chain More Responsive Requires Organizational and Process Change

Making the Supply Chain More Responsive Requires Organizational and Process Change

January 7, 2010
Jean V. Murphy, SupplyChainBrain

Most companies understand that today's market environment requires them to become more agile and responsive, but few comprehend the supply-chain changes required to make the leap from simple efficiency to true responsiveness, says Michelle Meyer, director of supply chain solutions at Hitachi Consulting. In a survey of 164 companies in eight manufacturing sectors, done in conjunction with AMR Research, Hitachi sought to better understand the supply chain processes, practices and technologies that are necessary for companies to make this shift.

"One of the core things we find among companies that truly are customer responsive is a very, very good demand planning or sales and operations planning (S&OP) capability, which includes the ability to collaborate with customers to get reliable demand signals," Meyer says. "Our insights show that companies have to be very good in this space in order to be responsive, regardless of the industry or customer base they serve."

Having the right metrics in place is another key capability. In the consumer packaged goods sector the Perfect Order is a valid and widely accepted measurement, but it is less prevalent in other industries, Meyer notes. "One predominant way to assess how well your supply chain is doing is to measure actual demand against the demand signal you are using and to do that on a very fast cycle," she says. "This is different from forecast accuracy, which a lot of people get fixated on, and it drives very different behavior. It puts more emphasis on the variation of actual to planned demand."

The other metric that Hitachi is working on with clients is the percentage of the demand signal that is either actual demand or a collaboratively generated forecast, as opposed to a historical or statistically based forecast. "You might start with historical information but then you arrive at a collaborative set of data that you execute against and measure against," she says. Companies whose forecasts are based on actual or collaborative data are more customer responsive, she adds.

Becoming truly responsive to the market often requires organizational changes as well, Meyer says. "One of the most interesting findings that came out of our research with AMR was in what companies perceive as the single biggest inhibitor to having a responsive supply chain. By a very, very large margin, the number one factor was culture, particularly the culture around collaborating and sharing data and having a structure that enables that."

Organizations that are distributed or that have a lot of reporting channels and a lot of different people making decisions find it more difficult to be aligned and to collaborate on processes and technology for sharing information, she says. "We were surprised by the overwhelming nature of this response."

Essentially this means that companies need to "plan centrally and execute locally," she says. This doesn't necessarily require that supply chain managers all be in one location, but the supply chain organization needs to own the processes and resources across all locations and make the decisions about how to commit those to meet customer service requirements, Meyer says. "This is often the first or biggest change that companies are facing in terms of how to make the shift to being more responsive."

RELATED CONTENT

RELATED VIDEOS

Sales & Operations Planning SC Planning & Optimization Business Strategy Alignment Global Supply Chain Management Order Fulfillment Pharmaceutical/Biotech
KEYWORDS Business Strategy Alignment Global Supply Chain Management order fulfillment Pharmaceutical/Biotech Sales & Operations Planning SC Planning & Optimization Supply Chain Analysis & Consulting
  • Related Articles

    Making the Most of Supply Chain's Seat at the Strategy Table

    Making the Digital Pivot in Supply Chain Management

    Evolution of Change in the Supply Chain Swirling at Breathtaking Pace

  • Related Events

    Let Increased Visibility Ignite Your Supply Chain to Become More Resilient and Agile

    How to Plan More Effectively Across Your Supply Chain

Jean V. Murphy, SupplyChainBrain

Will Recovery Bring a Different Kind of Pain?

More from this author

Wake up to Coronavirus Updates and the latest Supply Chain News!

Subscribe to our Daily Newsletter

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • Coronavirus-watch-Armada

    Virus Update: EU Fails to Fix AstraZeneca Dispute; U.S. Needs 500 Million Doses

    Coronavirus
  • The World Is Dangerously Dependent on Taiwan for Semiconductors

    The World Is Dangerously Dependent on Taiwan for Semiconductors

    Technology
  • Supply-Chain and Procurement Software in 2021

    Ten Predictions for Supply-Chain and Procurement Software in 2021

    Coronavirus
  • California Trucker

    Why One Southern California Trucker Stays Independent

    Logistics
  • Shippers

    Shippers Saw a Need for Bigger Vessels, But They Built Them Too Big

    Logistics

Digital Edition

Scb home issue 27

2020 Supply Chain Innovator of the Year

VIEW THE LATEST ISSUE

Case Studies

  • LSP Saves Customer $1.5 Million a Year With MPO Global Inbound Management

  • Auto Supplier Wows Key Client Using riskmethods Supply Chain Savvy

  • Integrating Shipping and Compliance Saves Conglomerate Millions

  • How a Consumer Goods Giant Upped Its On-Time Delivery Performance

  • LSP Wows Global Client, Quickly Advances to Become End-to-End Provider

Visit Our Sponsors

6 River Systems ArcBest Armada
aThingz BluJay Burris Logistics
DSC Logistics DCSA (Digital Container Shipping Association) DHL Resilience360
Genpact GEP Honeywell Intelligrated
Infor Logility Magnitude Software
MPO Old Dominion Oliver Wight
OpenSky Ports America Purolator
QAD Precision Red Classic Riskmethods
TGW Systems Transportation Insights Watson Land Company
Westfalia Technologies Workjam Yang Ming
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright © 2016 - 2018 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing