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Striving to take their business to a new level, or just keep pace with increasing competition, many executives are realizing they need an expanded view of their company's business environment. There was a time when this meant looking deeper and harder into their own enterprise or slightly beyond to their immediate trading partners.
That's no longer good enough. Virtually every company-from manufacturer to logistics provider to retailer-is operating in a much more complex, multifaceted supply chain. This means their business is being impacted by a whole new set of factors from the far reaches of their supply chain.
The list of forces driving this change in supply chain dynamics is long, varied and, in most instances, not a surprise. It includes the usual suspects-globalization, a changing competitive landscape due to mergers and acquisitions, changing regulatory requirements, changing consumer expectations, and a high failure rate for new product introductions. There also are forces that are less top of mind, including shortening of product lifecycles, skyrocketing product variety, rising energy costs, increased congestion at ports and on roads, and the impact of real or potential natural disasters and terrorism.
Infor has analyzed those business forces and the impact they are having on manufacturers, logistics providers, and retailers and developed a new way for companies to view their supply chains. We call it the "concept-to-customer" approach to supply chain management.
In this whitepaper, we will describe concept-to-customer supply chain management in detail and the eight strategies customers can take to get a broader view of their supply chain for improved business performance.
Concept-to-customer supply chain management
In its simplest terms, the concept-to-customer approach to supply chain management can be de ned as taking the broadest possible view of the variables impacting a business. It's a tacit acknowledgement that today's typical supply chain is multifaceted and multidimensional and requires companies to see it that way. Based on our analysis of supply chain management trends, we believe companies are best served by viewing their supply chains in terms of three dimensions: internal, external, and customer.
Internal dimension-the supply chain you control
A company's internal dimension encompasses the physical aspects of its business that are largely under its control. These include manufacturing, distribution, or retail capacity and the time and costs that go into sourcing, producing, and distributing products. Improving performance in those areas has, to date, been the priority of most supply chain management initiatives. For manufacturers, this has meant investing in automation and sales and operations planning technologies. For distributors and retailers, the priority has generally been on supplier relationship management, warehouse management, and transportation management solutions and the integration of those solutions to deliver visibility of supply.
Forward-thinking companies recognize that the internal dimension also encompasses the design of their products and the network they use to get them to customers. Network design includes such considerations as where to place manufacturing and warehousing facilities, how to design a distribution network, where to place retail outlets, and how to format stores.
Given the complexity and global nature of many supply chains, network design is of rising importance with signi cant impact on bottom-line results, as recognized by the many companies who have already made decisions to "offshore" production. However, there is mounting evidence that these decisions need to factor in multiple considerations, including traditional cost o sets such as production costs, distribution, and inventory as well as non-traditional considerations like the greater risk of product damage and delay resulting from offshoring.
Product design, another component of the internal dimension, encompasses all the considerations that go into the design process, including market requirements analysis, manufacturability, and the ease with which the product can be distributed throughout the supply chain.
Companies are being supported in the concept-to-customer approach by product lifecycle management and network design solutions that help them more effectively design products and make strategic decisions about where to place manufacturing, distribution, or retail capacity.
External dimension-the supply chain you don't control
The external dimension is comprised of business factors over which companies have little or no control. As a result, the external dimension has been a lower priority or absent from many supply chain initiatives. Included are external forces, some of which are predictable and some not.
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