What
it takes to accelerate supply chain speed and velocity and why it matters.
“I
feel the need. The need for speed.” It’s a signature line from the film, “Top
Gun,” a brief conversation that takes place between Navy fighter pilots
Maverick and Goose before they climb into their planes for a practice dogfight.
Of course, the need for speed isn’t just limited to flight maneuvers 30,000
feet up in the sky. Speed, or velocity, is also a must-have for an effective
supply chain.
Supply
Chain SpeedGiven consumer demand for nearly instantaneous fulfillment across a
variety of channels (in-store, Web and smartphone) and ever-shorter product
lifecycles, the pressure is on to move goods and materials through supply chains
at a record pace. This is especially true for the high-tech and retail markets.
In many ways, speed has become the new currency of the decade when it comes to
the supply chain.
At
a recent Supply Chain Management Professionals conference, Greg Rake of Pier 1
Imports noted that the value of an effective supply chain very often comes down
to speed – getting products to market faster than your competitors allows you
to corner the market, even for a brief time.
Rake
also pointed out that time to market is driven by the speed of the supply
chain. The faster you can move materials or data from one source to another,
the more valuable you are to your customers. The trick is to do so without
waste. Every time a product is “touched”, the risk of additional cost, damage
or time rises. So, supply chain velocity isn’t about reducing cycle time for
speed’s sake. It’s about driving velocity in the service of a larger and more
specific business goal.
So,
what is a high-speed/velocity supply chain?
In
a nutshell, a fast and efficient supply chain:
Moves
fast, but is aligned to a specific purpose or direction
Is
driven by business goals/plans/objectives
Aims
to capture customers in specific markets with specific products
Flows
from robust planning that aligns supply chain activities to business goals
Offers
continuous visibility into supply, demand and product movement
Features
established business processes that ensure destination reliability
Five
simple ways to turn up the speed of your supply chain:
Keep
a finger on the pulse of global market conditions and be ready to adapt: Know all you can about everything from
macroeconomic issues in Europe to currency fluctuations in China to
geopolitical events and the costs of real estate & fuel. This way, you can
switch gears to accommodate change in an instant.
Boost
visibility & control: react to customer demand signals fast by improving
visibility and control. With access to real-time information on
demand/inventory levels, the ability to track product movement from source to shelf
and a Control Tower or logistics planning software, you can dynamically plan
and adjust product movements to get products into the hands of customers when,
where and how they want them.
Synchronize
business processes across functional groups: to make sure the right information
gets into the hands of people who need it across every node in your supply
chain. This helps align business goals across business processes.
Harness
the power of LEAN to unlock efficiencies in your supply chain: Lean principles drive
efficiency by standardizing tasks, processes and the use of
technology/materials handling systems. With a Lean culture, you can make better
use of time, technology and people, setting performance goals and rewarding
employees for exceeding them. You can unlock supply chain efficiencies by
creating a Lean culture and a plan to transform and align critical processes
and cycle times to your customer and supply chain requirements. However, don’t
re-engineer processes just for the sake of change. Make sure all changes align
with your overall supply chain strategy.
Upgrade
your supply chain infrastructure to foster collaboration and agility: Make sure
your supply chain infrastructure is robust enough to foster collaboration among
supply chain partners, support flexible product movements and minimize touches.
This might mean using a fast data-exchange platform to get real-time
information to every stakeholder, product completion centers to customize
packaging before consumption or mixing and consolidation centers to gain
economies of scale.
What
is your organization doing to increase the speed/velocity of your supply chain
to improve customer service and reduce cost and waste?
See
more at: http://blog.ryder.com/2013/05/want-to-shift-your-supply-chain-into-high-gear/#sthash.F7EgKKMA.dpuf