The Promise of Supply Chain Collaborative Networks

by Paul Lavery
Director – Solutions Enablement, Supply Chain

A pervasive problem in the retail value chain is making sure that the right item is in the right place at the right time. This is the goal for all supply chain planning, preferably with minimum stock levels at all locations in order to optimize efficiency and profitability. But what is the right item and where is the right location? Reports from most “product-based” industries show us that this is not a simple question to answer.

Today, you can find reliable answers by using forecasting and planning applications combined with web-based or cloud-based visibility tools to get crucial information from all parts of a supply chain. Managed File Transfer (MFT) solutions now provide the critical middle layer to facilitate the data. This ensures that, for example, POS data gets to the right destination in a rapid and secure manner. Most advanced MFT systems will also provide a view into the file path. A select few solution providers can actual parse into the file and add governance and visibility features. This more advanced functionality provides the best profitability path to reduced stock, without losing service levels with channel and trading partners.

The ability to share forecast information via self-service portals is becoming more and more important as well. For example, now that technology can provide the platform, a salesperson’s input to the forecast, made from any location—and the supplier’s view of the customers’ future demand predictions—can be correlated via a central source. These interaction patterns are beginning to deliver on the promise of supply chain collaborative networks. We are nearing a point where some market players are accomplishing the main objective of any supply chain—minimize conflict between establishing safe stock levels at all critical points in the chain and avoiding excess stock from piling up.

Here are some key elements to carefully consider:

  • Safety stocks driven by necessary service levels at all locations
  • Demand forecasts for immediate replenishment quantities and future orders enable suppliers to anticipate peaks and troughs in future requirements
  • Making the right correlations helps forecast and planning applications simulate exact scenarios and calculate the consequences
  • Recommending orders based on demand forecasts, safety stocks, current stocks, orders not yet received and back orders
  • Calculating the constraints of the business environment for longer-term planning
  • Managing by exception if tighter stock controls are required
  • Providing supply and demand information throughout the pipeline (i.e., supplying the data needed to optimize stock allocation)

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