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Access to Unique Process and Asset Capabilities: Some suppliers offer unique skills, technologies, or processes that are not available in-house or through other sources. Or they may have expertise in manufacturing processes and have flexible capacity to allow contract manufacturing for new product introduction.
Companies leaning heavily on global sourcing? Theyre feeling the heat most, as sudden trade policy curveballs throw procurement plans into chaos. manufacturer I know saw their import costs jump overnight, forcing a rethink of a decade-old sourcing strategy. What Is Agile Procurement?
For example, if I improve the cost structure in transportation, procurement, manufacturing and sales independently, what decision support framework decides the right trade-offs? The celebrated group is doing the best on the operating margin, where only 24% rank below their peer group. You are right. Your next step?
SAP is embedding its generative Joule across the SAP Ariba source-to-pay solution portfolio to make it easier for their customers to manage routine inquiries, such as status updates, summarization, and frequently asked questions. The Warner Music Group was an early adopter. Their copilot-style solution is known as Joule.
Reducing cost was the primary objective, and most operational decisionsfrom sourcing to fulfillmentreflected that mindset. First, overreliance on a narrow group of suppliersespecially those in politically sensitive regionsexposes companies to risk when trade relationships shift. Procurement is another area seeing change.
In the competitive industrial landscape, efficient spare parts inventory management is crucial to maintaining seamless operations and driving profitability. Organizations require robust inventory management systems capable of handling diverse parts throughout their lifecycle.
A recent supply chain planning market analysis released by the ARC Advisory Group suggests EY has picked up on a trend. While executive support for purchasing SCP has waned, future sales of supply planning are still linked to a suppliers ability to support agile planning. For SAP, good planning relies on robust collaboration.
Despite the evolution of technology, none of the 28 industry segments I follow can drive improvement at the intersection of operating margin and inventory turns. I define supply chain excellence as the ability to outperform an industry peer group during a time period. Change is Hard. Unlearning is Tougher. Guess what?
In May 2025, one in seven home-purchase agreements fell through resulting in the cancellation of 56,000 purchase contracts. Supply chain was defined in 1982 as interoperability between source, make and deliver. Instead, the alignment between operations and commercial groups grew three-fold. Why is a reinvention needed?
It is crucial for organizations to understand the importance of Purchase Order collaboration to effectively manage their direct spend, optimize operations, and mitigate risks. Make to Order: Here, products are manufactured based on specific customer orders.
Optimizing fulfillment requires a series of steps to get a shipment from its source to the end customer. These steps include sourcing and receiving inventory, storing inventory, order processing, picking and packing an order, shipping the order, and returns management.
An increasing lineup of advanced digital solutions have given manufacturers the edge to transform and achieve better inventory control. The manufacturing industry is constantly searching for new and inventive ways to improve inventory management. Types of inventory that can be optimized.
If you would like to participate in a current research study, we would love your help and participation in the contract manufacturing study. We are trying to assess the value of a network in managing contract manufacturing.) One of the alignment gaps that is growing and is unfortunate is the gap between procurement and manufacturing.
In today’s dynamic market, procurement is far more than just a buying and purchasing center. Forward-thinking organizations have transformed the department into an untapped gold mine that creates value for the entire end-to-end manufacturing process—from design and sourcing to production and delivery.
Most of the business networks were hollowed out by venture capitalists or purchased by opportunists. Yawn and walk on if the answer is i mproving demand error or reducing inventory levels. The session is open to manufacturers, retailers, consultants, and academics. The business network market is in need of innovation.)
My definition of a network is the bi-directional information exchange of manufacturing, procurement, quality, and transportation signals across multiple tiers of trading partners in a many-to-many trading partner information exchange with minimal latency. Today, this network operates with less capacity and ballooning inventories.
In a previous post , I made a case for how the Chief Supply Chain Officer (CSCO) and Chief Procurement Officer (CPO) are smarter together. Accordingly Supply Chain and Procurement will need continuous collaboration. Such sourcing events can be in the context of direct materials or logistics capacity.
At each company, there is a relationship between the metrics of growth, margin, inventory, customer service, and asset strategy. Keith led the work to move P&G from a regional to a global manufacturer opening up the Warsaw center of planning excellence and outsourcing IT to HP. The supply chain is a complex non-linear system.
For my long-time readers, you know that fewer than 3% of companies outperform their peer group in our Supply Chains to Admire analysis , and that the Gartner Top 25 is essentially a beauty contest for underperformers. The third step is to do a data inventory. The focus is on unveiling a new, bright, and shiny object. And what is value?
Trey is the Co-founder and CEO at Amplio , an Atlanta based tech firm that predicts and prevents material and parts shortage for companies in the electronic manufacturing space. Trey Closson is the Co-founder and CEO at Amplio, an Atlanta based tech firm builds supply chain resilience for electronics manufacturers. About Trey Closson.
This sector is driven by several factors, including the ageing vehicle population, the rise of e-commerce platforms , and technological advancements in vehicle manufacturing. Moreover, the proliferation of e-commerce is reshaping how aftermarket products are purchased.
Today, I speak at the North American Manufacturing Association, Manufacturing Leadership Conference, in Nashville on the use of data to improve supply chain resilience. Interestingly, in Q3 2023, 38% of manufacturers, distributors and retailers missed their target for revenue guidance for the quarter. The result was restatement.
GEP and the North Carolina State University (NCSU) Supply Chain Resource Cooperative surveyed supply chain, procurement and IT professionals across a range of industries to gain insight into their priorities and strategies regarding supply chain resilience and optimization. Procurement solutions are often updated with purchased information.
The Losers Are the Global Multi-National Supply Chain Teams As I work on the Supply Chains to Admire report, that will publish soon, I wince at the performance of large strategic customers of the supply chain planning vendors when compared to their peer groups. The methodology is now 20 years old. Let’s have an honest discussion.
The Salesforce.com model is primarily a pipeline management tool suitable for discrete markets but not process manufacturers. Relex will continue to do well in the retail market but will struggle to be a serious player in manufacturing due to the lack of thought leadership. Will this change the market? I don’t think so.
During the 1980s, I was on a management team for a large manufacturer. The Company was attempting to gain economies of scale by groupingmanufacturing technologies within a common infrastructure to reap the benefits of a co-generation facility, a centralized warehouse, and a talented administrative team.
Only four percent of companies compared to their peer groups improved balance sheet performance of growth, operating margin, and inventory turns. When compared to pre-recession years, we ended the decade with twenty more days of inventory. Days of Inventory Comparison. Both companies outperformed their peer groups.
His organization purchased an advanced planning technology from well-known best of breed provider, and the implementation should have been successful, but it was not. As a result, demand planning is largely manual, inventory management is a series of manual inputs, and production planning is via spreadsheet. (BTW,
Picture this: You’re a warehouse manager, and with a few taps on your smartphone, you instantly know the exact location and quantity of every item in your inventory. That’s not science fiction—it’s the power of mobile inventory management. Ready to turn your inventory from a headache into a strategic asset?
One of my insights from doing the industry analysis for the Supply Chains to Admire each year is that smaller and less well-known companies outperform larger and better-known manufacturers. While companies that supply chain leaders believe are top performers– J&J, P&G, and Unilever– do not outperform their peer group.
I know that your primary focus is procurement. If S&OP efforts were that effective, don’t you think that we would have made more progress against inventory levels, margin, and growth? In part, this results in increasing swings in inventory in response to shifts in consumer demand as one moves further up the supply chain.
My thought was to combine my experience working on visibility solutions with Descartes Systems Group and Manugistics with recent research data. Too few companies have a holistic approach to embrace the plan, make, source, and deliver together. I volunteered to write a report on supply visibility. I thought it would be easy.
Since January, Canadians’ weekly grocery trips have become a real-time indicator for the potential impacts of tariffs as shoppers have responded to threats with a showcase of buying power, prioritizing nationally sourced and manufactured products even before a single tariff was enacted. goods were “ rapidly dropping.”
Bob Gill, General Manager of ARC Advisory Group (right), presented the award to Dave Ching, Head of Sales for Southeast Asia, Australia, and New Zealand (left). trade policies on sourcing strategies, inventory flows, and distribution networks amid rising costs.
This report, Supply Chains to Admire , compares the progress of 200 companies within their respective peer groups on both performance and improvement. There are three reasons why: Vertical excellence—having the best manufacturing, procurement or transportation function—has not worked. ” Yes, I said. Supply Chain Design.
While consumers may see some short-term benefit in the form of discounted goods, many retailers have had to reset investor expectations , reflecting the expected hit on margins from carrying so much inventory. Inventory management is challenging enough in normal times. So, what is it going to take to enable better inventory management?
In this scenario, by adopting an adaptive supply chain, the retailer uses real-time data analytics to identify emerging trends and collaborate closely with suppliers to quickly adjust production and inventory levels to meet customer demand. This collaboration enables faster response times and cost savings.
It was my first time working with this group. The team was organized around the functional silos of source, make and deliver. The group laughed. ” The group was quiet as we discussed the fact in the traditional organization that functional silos are not designed to work together. My name is often mispronounced.
The award, based on beating the industry peer group on rate of improvement on the key metrics of growth, operating margin, inventory turns, and Return on Invested Capital (ROIC) while outperforming their peer group, is tough to achieve. Based in Paris, L’Oréal is a global personal care manufacturing company.
Similarly, UPS has strong commitments to sustainability and invests in many options, such as alternative fuel vehicles, e-cycles in dense cities, and carbon offsets for purchase with shipping. We must plan, source, make, and deliver differently for supply chain sustainability. But what about the role of planning?
And even before they begin, they must realize these problems are too big for any single team—supply chain must connect with finance and procurement to treat the n-tier suppliers as an extended part of their network and become their preferred customer. By identifying these gaps, you can create sourcing events to close them.
Distribution industry supply chains have always been squeezed between manufacturers and their customers; facing increased competitive threats, escalating SKU counts, and expanding ecommerce. Right-sizing inventory. Avoiding inventory overages and shortages begins with a better forecast, but also requires a smarter inventory strategy.
Inventories in the chemical industry are at record lows: a forerunner of bad days ahead. While we will recover quickly in retail (moving from painful shortages to a glut of inventory), the chemical industry–sitting four and five layers back in the supply chain–takes longer to recover. Retail shelves are increasingly empty.
Over the last six years, we studied the connection between business results (growth, operating margin, inventory turns and Return on Invested Capital (ROIC)) and the link to company characteristics. The technology group wanted to implement SAP IBP, and the business leaders were resistant. What did we find? The gap was large.
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