The Definitive Guide to Integrated Supply Chain Management: Optimize the Interaction between Supply Chain Processes, Tools, and Technologies by Gibson Brian J

Author:Gibson, Brian J....
Language: eng
Format: epub
Published: 2014-01-29T21:01:59.289000+00:00

Tradition and fear play major roles in disconnected supply chains. The field evolved from a mixture of internal functions that operated independently and sometimes competed for resources. Add in a variety of external participants that may not be willing to share information, connect systems, or develop compatible procedures, and the makings of a nonintegrated and potentially dysfunctional supply chain emerge. Ultimately, connecting the people, processes, and technologies across a supply chain is both time-consuming and expensive. Unless a strong supply chain leader can overcome these concerns with a strong vision for process alignment, it will be difficult to gain buy-in and action from affected parties.

Supply chain process disconnects generate numerous consequences and related financial repercussions for an organization. When a supply chain is not synchronized around demand response, production managers base their activities on forecasts and internal production schedules. Ineffective forecasting can lead to incorrect allocation of limited production capacity, excess finished goods inventory, and a backlog of customer orders that require expediting. In turn, higher supply chain costs are incurred. The inability to respond rapidly to changing market conditions is another flaw of disconnected processes. For example, if the fulfillment and transportation capabilities are not agile enough to rapidly shift inventory between regions, the organization will miss out on revenue-generating opportunities. In both cases, the income statement is negatively affected by the incompatible, ineffectively coordinated supply chain.

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