Strategies for Efficiency

The recent rice shortage has shocked financial markets and retailers in Asia. This has led to consumers buying and hoarding the staple food in frenzied anticipation of prices skyrocketing. As Asian governments work to ensure the supply of rice, rice-growing nations assured the markets of quicker rice production and the release of rice stockpiles.

Asia’s grocery chains are also negotiating with rice suppliers to ensure continued supply. Their sourcing of other rice suppliers and channels is best described as the concept-to-customer approach to supply chain management (SCM) –taking the broadest possible view of the variables impacting a business. Implementing a concept-to-customer approach requires adopting a set of actions and business processes unique to a business for a more resilient supply chain.

Rolling out strategies

Companies should consider adopting the following strategies to build visibility and resilience into their supply chains.

1. Adjust existing network


The ownership of manufacturing, warehousing, transportation, and/or retail capacity represent the largest fixed cost of the business. Companies should assess their supply chain networks on an ongoing basis for business optimization, which is best done several times a year.

2. View demand globally


Globalization of the business requires evaluating customer demands on a global scale. Companies can create and better deliver solutions, as well as detecting trends and changes. Consider deploying a collaborative demand-planning solution to react quickly to changing buying patterns. This can also set parameters for plans in inventory, production, sourcing, and distribution.

3. Work on the supply network


Use network optimization technologies to react quickly to unpredictable external factors such as disruptions due to failure in manufacturing or supply, rising fuel costs and high product demand.

4. Boost asset productivity


Capital asset productivity varies in manufacturing, logistics and retail industries. Boosting the productivity of the business’ capital assets involves selecting suitable planning and scheduling technologies for the business. This is also true when deciding the warehousing and transportation management capabilities needed.

5. Expand visibility


A product travels to greater distances, passes through more channels,and crosses more systems before it reaches the customer. This results to possible disruptions to the smooth movement of goods. By extending supply chain visibility, companies could create a resilient system that could adapt more quickly to changes.

6. Know what happens, when it happens


As supply chains grow rapidly, business processes that rely on exception reporting or periodic variance analysis to detect and respond to changes cannot react quickly. Therefore, companies need new solutions and experienced staff to cope with change.

7. Design to deliver


Have a third-party logistics provider in the supply chain process, especially at the product design stage. Currently, logistics providers rather than the manufacturer are completing the final configuration of many cellphones and computers. This enables the manufacturer to produce, ship, and stock products in conservative quantities. This approach is flexible to changes as it lowers manufacturing risks, enables a better customer-specific configuration and delivers final configured products within 24 hours.

8. Track performance for continuous improvement


To sustain the concept-to customer supply chain approach, it is necessary to measure and track how well companies are addressing challenges from the three dimensions mentioned and against key performance indicators. They allow a complete, accurate, and timely knowledge of the factors that are influencing the business. They also improve visibility and the ability to anticipate and respond to risks and opportunities in the supply chain.

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