The recently released Supply Chain Intelligence Report (SCIR) is an international, independent study on supply chain management and logistics practices in emerging economies, conducted in South Africa. The aim of the research is to provide insight into many forces that are driving change in supply chain management and to demonstrate how the most successful companies are dealing with these new and evolving challenges. Conducted annually, the SCIR facilitates progress and development in supply chain and logistics practices through the sharing of information and knowledge, without compromising confidential or strategic information.
The basic premise of the report is that planning and forecasting are undoubtedly the only big challenges to efficient supply chain management – as further illustrated by several international studies in recent years. Yet as we all clearly realize, the world is changing, and it is changing at a far faster rate than before – one of the primary drivers of this rapid change is information, the freely available and accessible information that the average person has access to.
What the SCIR 2009 proposes is that the only really effective way of addressing the planning and forecasting challenge is to improve visibility (both for demand and supply) in a supply chain, while simultaneously increasing the supply chain’s reactivity. If this is achieved, one will be able to plan and forecast and thus have an effective and efficient supply chain.
Visibility is the capability of easily observing, of being able to provide a clear view in respect of both supply & demand and is primarily determined by two drivers: technology and collaboration. By increasing forward and backward visibility along the supply chain, companies will have a greater lead time to adjust their production schedules and orders. Through the efficient use of technology, one is able to have greater access to information (in real time) and thus greater visibility.
Reactivity on the other hand is the ability to readily respond to a change, in this case a change in demand, with supply chain reactivity being best improved through the appropriate use of in-sourcing, outsourcing and virtual resourcing, as well as through integrative practice techniques. The report elaborates on the fact that the essential components of reactivity are ‘flexibility with respect to the ability to deploy supply chain assets, and the ability to assemble a virtual best of breed supply chain team that can redesign, implement and operate what will need to be almost an organic supply chain - one that changes, learns and evolves continuously.’
The report further goes on to expound the hypothesis that planning and forecasting are inseparable parts of what drives competitive advantage. In fact, planning and forecasting really drive efficiency – defined as cost reduction and precise execution – which is also matched by effectiveness – defined as doing the right thing at the right time. Effectiveness in itself is supported/driven by market sensitivity; which is an ability to acutely read and/or understand the market and be able to detect and anticipate events before they actually occur. Once all these are in place, understood and properly managed/executed, then a company has created a competitive advantage and can be defined as a ‘winning company.’
You can get a free copy of the main research report if you participate in the survey, which will take you about 10 minutes to complete, on the official SCIR 2009 website.