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Trade policies are constantly evolving, forcing companies to assess how these changes impact customer demand, supply networks, fulfillment strategies, and cost to serve. To mitigate such risks, manufacturers need to learn from others and look at how they can: Diversify sourcing strategies to include (in this case) North American suppliers.
Reducing cost was the primary objective, and most operational decisionsfrom sourcing to fulfillmentreflected that mindset. More recently, fluctuating trade policies have emerged as a persistent challenge, especially for firms with global footprints. For years, supply chains were engineered to be lean.
This policy shift is being positioned as a voluntary industry transition rather than an outright regulatory ban. From raw material sourcing to logistics and regulatory compliance, stakeholders across the value chain will need to prepare for structural adjustments. This raises complexity in planning, labeling, and inventory control.
We are no longer just forecasting demand but also when trucks and factory machinery are likely to break down ( predictive maintenance ), the optimal amount of inventory to hold and where it should be held ( inventory optimization) , and labor forecasting in the warehouse. ML is being used to keep key parameters and policies up to date.
Automotive: Can JIT manufacturing survive legal disruptions to tariff policy? Automakers must model dual-path sourcing strategies and reintroduce buffer inventory—not just for parts, but for regulatory flexibility. They should also adopt rolling sourcing contracts with dynamic pricing clauses based on tariff exposure.
This is amplified across the supply chain into an exponential impact on inventory and planned orders for manufacturing. Inventory Health. I find only 8% of companies actively measure inventory health. Few organizations have the ability to manage the form & function of inventory. Measure inventory health.
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. They may be able to shave 15% off their costs and dodge a tariff bullet.
From sourcing and bid evaluation to warehouse slotting and dynamic routing, AI tools support faster and more consistent outcomes by processing large volumes of operational data and identifying patterns that human decision-makers may overlook.
Deflationary pulses are important to understand in our current environment of widespread inflation and a recent commitment to tighter monetary policy to reign it in. I did a little digging to find out the specifics about excess inventory, the stated causes, and the potential implications. This talk of deflation caught me off guard.
This urges a shift from the unsustainable practice of buffering against uncertainty with high inventory levels. Enter Inventory Optimization (IO) as a vital strategy to combat supply chain stress. Yet, recent research suggests a more advanced approach, Multi-Echelon Inventory Optimization (MEIO), surpasses traditional methods.
What is the role of make, source, and deliver? In our work with Georgia Tech using data from 1982-2023, we find that the R² of the Regression analysis of Cost-of-Goods Sold/Inventory Turns when compared to correlations of Operating Margin/Inventory turns to Market Capitalization/employee is 40-65% lower.
Do Embrace Technology and Data : Use real-time data for demand forecasting, inventory management, and route optimization. All rights reserved Privacy Policy Cookies Do Set Clear KPIs and Governance Structures : Establish transparent metrics for sales, coverage, and service levels.
Supply chain was defined in 1982 as interoperability between source, make and deliver. It includes hedging strategies, alternate bill of materials, supplier sourcing strategies, changing routs to market, redesigning push/pull decoupling points, demand shaping policies, and use of outsourced manufacturing and distribution.
Source: Gartner Research. Gartner Research analyst Paul Lord has developed a thought-provoking approach (shown in the above diagram) for tailoring supply and inventory tactics to different inventory segments. Traditional ABC inventory models segment inventory into A, B and C categories based on annual consumption value.
Returns come with plenty of challenges around logistics, inventory, and predicting volatile sales trends. 84% of buyers read the return policy before making an online purchase. Knowing the importance of managing the return of merchandise, let’s look at the goals and benefits of a customer-centric return policy.
Manufacturing can not only use IoT for manufacturing, but also to give inventory management greater flexibility and improve decision-making. How IoT works with inventory With inventory management being a key factor in profitability and cost containment, active inventory management is essential.
trade policies on sourcing strategies, inventory flows, and distribution networks amid rising costs. Over two days, the forum addressed key macroeconomic and operational challenges facing the logistics sector. A major theme this year was the global tariff environment, particularly the impact of evolving U.S.
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. Go to the source.
This blog offers a clear, practical overview of what spend analysis is, how it supports strategic sourcing, and why it matters for both direct and indirect procurement. When done right, spend analysis enables cost savings, supplier optimization, risk reduction, and more strategic sourcing decisions.
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.”
This new system of inventory management will go into effect on March 1, and will replace weekly restock limits that Amazon used for calculating FBA storage. Directors at Amazon agencies and accelerators said that these new changes will help sellers forecast inventory better.
The process as is implemented in many companies focuses on balancing demand and supply based on preestablished rules and policies that serve as guardrails for the planning process. Strategic placement of inventory buffers to ensure sufficient ability to absorb shocks. One off recommendations are made about facility locations (i.e.,
Supply chain disruption has many sources: tariffs and trade disputes, natural disasters, pandemics, economic uncertainty and cybersecurity attacks. There won’t be a new normal, just new sources of disruption, from weather to government policies to industry conditions. Price fluctuations and sourcing issues.
Companies importing and exporting goods, be it finished retail products, manufacturing components or materials, now face substantial cost and price pressures that squeeze margins and force difficult pricing, sourcing, operations and distribution decisions. For example, you might source from a domestic supplier that doesnt incur a tariff.
Source: Supply Chain Insights ASCM defines resilience in the SCM Supply Chain Dictionary as the ability of a supply chain to anticipate, create plans to avoid or mitigate, and to recover from disruptions to supply chain functionality. I am currently doing research on inventory management. Today, this is not the case. Yes, I think so.
Scenario planning is essential for anticipating the impact of policy changes to aspects such as tariffs, immigration and regulatory incentives on operations and supply chains. Predictive analytics can be used to process vast amounts of internal and external data to detect potential inventory shortfalls before they manifest as crises.
This guide breaks down the key procurement technologies in use today and the trends reshaping the future, such as AI-driven sourcing, predictive risk management, and deeper integration across the supply chain. What Is Procurement Technology?
Given the dynamic nature of international trade policies, these numbers and policies may have changed already. Uncertainty and Chaos Given these often changing tariff policies, what's the immediate concern from everyone in the e-commerce sector? The policies are fluid, and what's true today might change tomorrow.
With the advent of true “single source of truth” inventory visibility , a digital twin is a more feasible goal than ever before. In short, they help users make better decisions, much faster, resulting in improved financial performance, inventory efficiency, and customer satisfaction. Get the insights you need.
Sourcing Strategy: Effective vs Efficient with Ron Crabtree. Joe Lynch and Ron Crabtree discuss sourcing strategy: effective vs efficient. When developing a sourcing strategy, the focus can be effectiveness (gaining desired results) or on efficiency (reducing cost, labor, and resources used). About Ron Crabtree.
It may include everything from open-source libraries to third-party APIs, cloud services, and even the hardware that runs the software. These could be third-party libraries, open-source code, or APIs. Moreover, disclosure risks can also arise from the use of open-source software components.
On our budget then, this felt like a fortune and fueled my interest in energy policy. We must plan, source, make, and deliver differently for supply chain sustainability. These examples address the source, make, and deliver areas of supply chain. It was a rude surprise when I learned it would cost $100 to fill the tank.
She found that the best combination of metrics to evaluate total cost is a balanced scorecard of revenue per employee, operating margin, inventory returns, and return on capital employed. These levers could be alternate sourcing, alternate routing, changes of push-pull decoupling points, or even changes to the product portfolio.
There won’t be a new normal, just new sources of disruption, from weather to government policies to industry conditions. Don’t expect to plan for every disruption; instead, develop a strategy to overcome supply chain disruption, regardless of the source. Price fluctuations and sourcing issues. Trade disputes and tariffs.
Source: Dictionary.com. How will the policy be executed? Today, there is not a well-defined template on how to build and operate a supply chain defined by customer policy and segmentation strategy. The journey began with a one size fits all approach in 2008, and the policies evolved over the course of the last seven years.
From the new tariffs impact on supply chains to newer policy shifts between the U.S., Tariffs are reshaping sourcing strategies, forcing tech upgrades, and making inventory planning a lot more complicated. Imagine a mid-market fitness equipment company sourcing metal frames from Taiwan.
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. We like the metrics of growth, on-time and in-full orders, operating margin, inventory turns, and Return on Invested Capital (ROIC).
Too many companies get locked into traditional processes and a familiar vicious cycle: unable to reliably forecast an increasing number of SKU combinations, they load up on inventory to accommodate long-tail, erratic demand. achieving the same overall customer service level objective with far less inventory expense. percent, etc.,
Sarah Voorhees, VP of Demand and Inventory Planning at American Tire Distributors , is one such leader who emphasizes the importance of individual check-ins: A 1:1 conversation can be intimidating, though, especially if the person has sensitive concerns. Source: Fortune. #3: Source: Fortune. But it doesn’t have to.
In today’s fast-paced industrial landscape, managing spare parts and MRO (Maintenance, Repair, and Operations) inventory is more than just keeping shelves stocked. With effective Spare Parts Inventory Optimization , businesses can strike a balance between availability and cost, ensuring seamless operations without overburdening budgets.
With new policies affecting imports and exports across key marketsincluding the U.S. In doing so, organizations can quantify their exposure and prioritize which products or sourcing strategies require immediate attention. and Chinasupply chain leaders must move quickly to assess the impact and adapt their operations.
Excess inventory – it’s taking up your warehouse space, tying up working capital, and limiting your planning team’s range of motion. It’s time to Marie Kondo your supply chain by eliminating excess inventory and learning how to avoid it in the first place. Let’s talk about: What Excess Inventory Is. What Causes Excess Inventory.
Tesco and Walmart have announced procurement policies aimed at reducing carbon emissions and promoting sustainability throughout their extended supply chains. In North America, 81% of consumers said they would stop buying products from brands they learned were harming the environment. Retailers are following suit.
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