Integrated and cost effective supply chains (cont’d)
Only one-fifth of Canadian manufacturers indicate they
have a global VP (or senior leader) for global supply chain
whose mandate is to ensure integrated procurement and
supply chain efficiency globally – and the companies that
do not could benefit from more representation at the
C-suite level.
When supply chain, as a stand-alone function that is
not part of marketing or sales, has a role in the ongoing
Supplier visibility
No visibility – little to no tier 1 supplier visibility
12%
5%
Some visibility – limited tier 1 supplier visibility,
but not tier 2 and beyond
40%
37%
Enhanced visibility – tier 1 supplier visibility
and some tier 2 supplier visibility
13%
40%
strategic direction of the business, it can have a significant
impact on the company’s top and bottom lines and help
it achieve its key growth goals. Moving supply chain from
being a “necessary evil” to a “strategy enabler” is a winning
approach for companies who wish to succeed in today’s
highly competitive global market.
The reluctance to collaborate and co-operate with the
supply chain may once again be due to Canada’s riskaverse culture. When companies share information among
supply chain partners, they risk the information becoming
public or suppliers using the data to drive prices up. This
risk needs to be weighed against the potential payback,
however, which can be substantial.
In the absence of complete visibility, businesses all along
the supply chain use forecasts to help ensure they always
have enough inventory available. With the valuable
information that increased visibility, communication, and
lean manufacturing techniques bring, the supply chain
can become more agile and can quickly react to demand
changes or the introduction of new products without
suffering from high obsolescence costs.
For some companies, therefore, being risk averse when
it comes to their supply chains actually increases their
business risks. When the benefits can be so huge, taking
the risk and opening up the supply chain to collaborative
processes is often more than worth the payoff.
How best-in-class companies improve their supply chain performance
Companies that develop “best in class” supply chains focus on improving their everyday
performance and use all available means to stay ahead of the market. These companies:
Collaborate with all parties across the value
chain and establish strong alliances. Use new
technology to improve transparency of orders,
inventory, and shipments across extended supply
chains.
Meet continued pressure to drive down costs and
working capital levels.
Instil a performance culture and consider
deploying lean manufacturing in cases of low
variety, high volume production, and agile
Align the supply chain strategy and related
manufacturing in cases of high variety, low
initiatives with the overall business strategy.
volume production.
Ensure strong cross-functional participation
in planning and strategy development, and
execution.
Create operational flexibility to adapt to a
constantly changing market. Anticipate and adapt
to increasing product diversity and innovation.
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