Forecasting making way for customer engagement

Increased flexibility, agility and responsiveness has been cited as the top medium-term business objective by respondents to the 2012 SupplyChainForesight survey, sponsored by Barloworld Logistics.

The fact that using the supply chain as more of a competitive advantage was selected a close second is evidence that these two objectives are closely interlinked, and demonstrates the closer alignment of business and supply chain strategy over the last few years, said the report.

“The objective for business to adapt flexibly and quickly to variable customer demand in a tight and volatile market is something of a breakthrough.”

“Previously a strong focus on planning and forecasting has marked efforts to make the supply chain more competitive – but accurate forecasting remained, in past research surveys, a constant challenge.”

“The current focus on responsiveness marks a welcome shift to more engagement with actual customer demand and market conditions, rather than product and manufacturing schedules.”

How can supply chain strategy support the business…?

In terms of supply chain objectives, strong emphasis on cost management remained, however, it is accompanied by a realisation that partnership is essential to the use of the supply chain as a competitive advantage.

Therefore, increasing service levels to customers remained the number one supply chain objective, as it has in previous years. But this objective must still be achieved at the lowest possible cost, as the objective of lowering procurement costs and decreasing lead times came in second, said the report.

Improving visibility in the supply chain was identified as the next objective, followed closely by improving the flow of information between buyers, suppliers and customers, which suggests a maturing of the long-held mantra of the supply chain: collaboration.

…and where is it hampered?

Constraints identified in the report remain familiar.

The cost of transport features as the greatest supply chain constraint, for almost every industry sector.

“South Africa’s high logistics costs, and the imbalance between road and rail, have been well-documented. [However,] this has been exacerbated lately with the imminent imposition of tolling and carbon tax fees,” says the report.

However, there is a great deal of value to be had through businesses constantly re-examining their transport strategies and thinking laterally about them.

“Companies do need to ask themselves hard questions about reducing these costs – are they moving their goods in the most cost-effective way possible? Is each industry considering innovative ways of moving their goods differently – through co-operation with other industry sectors, for example?”

Also repeating it appearance is the second identified constraint: finding skills to enhance supply chain management.

However, surprising in its presence as a constraint, ‘reducing the environmental impact of the supply chain’ has made its first appearance in the top five, said the report.

“The increasing pressure to reduce carbon footprint and to hold suppliers accountable, set by legislation and tax regimes, undoubtedly accounts for this constraint becoming prominent.”

“The pressure on corporations to ‘go green’ is thus now affecting the bottom line.”

You can diarise 13 – 15 November 2012 at Gallagher Convention Centre to attend Smart Procurement World 2012, where the latest development and trends affecting Procurement and Supply Chain Mangement will be in the spotlight.

To attend Smart Procurement World email events@smartprocurement.net