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Retail Technology Review published an article “Supply Chains Hold the Future for Everyone” which further emphasizes the importance of collaboration as the critical success factor for today’s supply chain. As the sluggish economy continues to drag on, CEOs are under pressure to manage for cash, and the way to do that is to manage their supply chains. The problem is that supply chain thinking still has not fully penetrated most companies.

Five Key Principles for Supply Chain Success (collaboration is the foundation for each)

1) Reduce unprofitable complexity by truly understanding how both customers and products erode margin

Most companies have minimal understanding of the true cost of customers and products, which impacts the bottom line. Too often, keeping a customer or continuing to stock/store product is cost prohibitive. Without inventory visibility and information sharing, most companies are operating in the dark.

2) Build customer service excellence into your supply chain

Customer service excellence is based heavily on collaboration and being responsive to their changing needs. Too many companies react to economic adversity by cutting labor, which actually reduces customer service levels, instead of increasing efficiencies.

3) Become the preferred customer of your key suppliers

Getting preferred customer status with key suppliers begins with understanding the implications. The foundation for that is collaboration and information sharing. If neither of you have visibility into each other, how can you expect to effectively collaborate?

4) Design, plan and execute for agility

Planning, responding and reacting to a changing marketplace is the most important strategy any company can undertake. If you read the news today, inventory levels are at their highest in 20 years because of dwindling demand. While companies are worried about the present, they should be preparing for the future once the economy improves…and it will improve. Your competition is, and you can ill-afford to wait.

5) Synchronize and integrate to eliminate waste and cost

Redundancies, cost overruns, and general waste all negatively impact profitability more than you can imagine. The problem is that many companies have very little idea of that waste. Without visibility, control or collaboration, companies can’t even begin to understand where the waste lies.

Companies need to manage for cash, and collaboration is at the heart of that from solidifying customers and partners to building and strengthening a competitive advantage. The supply chain is more important than ever and does hold the future for everyone.

Retail Technology Review
Supply chains hold the future for everyone
by Alan Braithwaite and Martin Christopher
April 7, 2009
As the economic conditions get harder, there will be just one mantra for CEOs and their Boards: “manage for cash”.

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