Analyst Insight: The sales and operations planning process has fairly deep roots in most companies. Research by SCM World shows that many have been able to extend the process across most internal functions. However, few companies have extended the process externally to trading partners. The incentive structure of buyers and sellers tends to set these groups at cross-purposes. Flexibility pricing can shift the incentives in a direction that forces companies to negotiate the value of flexibility. - Barry Blake, Vice President, Research, SCM World
Years ago, supply management professionals turned to low-cost countries to manufacture products, establish services operations and source materials in an effort to improve the bottom line for their companies. They found that inexpensive labor in India, China and emerging Asian countries made this new low-cost-country strategy successful "” despite requiring the management of lengthy, complex supply chains. Then the world began to change.