Supply chain efficiency

Generally, efficiency is measured by a ratio of the level of output generated to the level of input consumed to generate that output. This concept can be 

In the conceptual framework of Fisher (1997), discussed earlier, efficient supply chains are more focused on cost minimization, the idea being that a supply chain that requires less cost input to generate the same amount of sales revenue oufput is more efficient. Therefore, efficiency measures in SCE are often focused on costs, and include the following  

In addition, other measures that may influence the costs listed above include the following  

Typically, supply chain optimization models focus on minimizing costs, since the decisions of supply chain managers often involve choices that directly influence cosfs, while revenue may often be outside the scope of the supply chain manager s decisions. Some SCE models, however, may appropriately involve maximizing profit, to the extent that it is clear that the decision at hand has both cost and revenue implications. 

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The opportunities for this form of computer technology are increasing within the changing regnlatory environment, encouraging more innovative uses of technology found in other industries and the use of Process Analytical Technologies (PAT), which offer potential supply chain efficiencies. 

Response time, product availability and variety, customer experience, time to market, order visibihty, and retumability effect supply chain design decisions Manufacturing processes (i.e. batch, job shop) have impact on supply chain efficiency. 

When the European common market was initiated, the projected European Union single-market benefits were that rationalization of production and distribution would potentially generate around 45% of the supply chain efficiencies. These efficiencies would occur through improved utilization of resources and higher reliability levels. 

This chapter describes the goals, main contributions and areas covered by the book, and also reviews the current market and business environment which demands for a demand driven focus in order to reduce product out-of-stock levels and increase supply chain efficiency. 

To cope with this scenario, many companies are trying to move from a pure Push strategy, produce and distribute based only on forecast, to a Pull system, operate based on actual customer demand, in order to better balance supply availability with customer demand, delivering the expected customer service level while, at the same time, achieving the required supply chain efficiency. 

Over the past years, to effectively manage the volatility in demand, companies across a wide range of industries (e.g., automobile, fashion, etc.) have adopted demand-driven supply networks, using the pull of actual customer demand, rather than the push of available supply, to manage their network of suppliers, materials and components from manufacturing to distribution to improve supply chain efficiency while simultaneously meeting customer service requirements. 

Demand uncertainty Information sharing and tight coordination can allow companies to regain control of supply chain efficiency. Sharing of demand information and synchronized planning across the supply chain are crucial for this objective. 

Same as in level 1, but in addition there is an attempt to increase overall supply chain efficiency through integration of different functional areas, in order to minimize total supply chain cost, instead of isolated functional area optimization. 

There is no clear increase in supply chain efficiency and better commercial execution in the market. 

Several companies have been implementing forecasting tools and processes to improve demand planning performance, but these initiatives were not enough to eliminate OOS problems, and improve supply chain efficiency, due to a mismatch between supply and demand, low forecast accuracy for medium and low volume products, high demand variability and/or high number of new product introductions. 

The demand chain has been a near mirror image of the supply chain. It has been driven by a business competitive imperative aiming to constantly improve its supply chain efficiencies. The demand chain must balance aglobally diverse mix of new customers (each with different needs and expectations), and it must also offer a degree of uniqueness to the business (Bariow-Hills Sarin, 2003). 

Netessine, S. and F. Zhang. 2003. The impact of supply-side externalities among downstream firms on supply chain efficiency. Working Paper, University of Pennsylvania, available at http //www.netessine.com. 

Everyone admires the supply chain efficiency that makes glitzy products like Apple s iPhone and iPad available everywhere or the availability of Coca-Cola even in many remote tourist spots. But not many understand the secret sauce. ... A much-needed balanced book that has deftly managed the twin objectives of rigor and readability, breadth and depth of theory and practice admirably well. ... 

Sales transaction data sharing, the use of mutually agreed metrics, and targets to be achieved in a specific period play a vital role in all these concepts. The same applies to the benefits that follow the increase in supply chain efficiency, namely the reduction of the costs of sales, storage and transport, a shortening of lead times, the better use of production capacity or an increase in supply reliability. 

The VCI is an extension of the type of information sharing practised in ECR. It aims to improve end-to-end supply chain efficiencies from the sourcing of raw materials to the dehvery of finished products in the consumer s hands. The goal of VCI is to link systems applications in a number of supply chain industries (e.g. distribution, import/export, warehousing) and share dynamic business information between new and existing trading partners. Sainsbury s is a proactive partner of VCI. 

Making money from the supply chain Pricing and cost always matter but ways of measuring money and managing the supply chain efficiently will change. Chapters 24 to 29 ... 

Supply capability is reviewed in the advanced levels with respect to the firm s core competencies and its value chain partners, and decisions made as to which partner should perform which process steps. In the most advanced levels, flexible response systems that do not interfere with overall supply chain efficiency are created. There is much lower variability in the network as all parties work together through an online extranet to instantly review what is occurring and where changes must be made. Constraints in the system are eliminated or under control as the end-to-end partners link their ERP systems in order to make visible what is occurring across the full network. 

Throughout this progression, supply chain efficiency is inexorably linked with a better understanding of exactly what is being demanded of the system. All of the process steps mentioned are affected by what is needed, when it is needed, and where it is needed. And forecast error often becomes the scapegoat for lack of an efficient response. Accurate forecasts are an oxymoron. The fact of the matter is that forecasts will always be inaccurate. In advanced supply chain, the challenge is careful management... 

The supply chain will be effective when provided implementation of the agreed tasks at the required level of quality at a reasonable use of the equipment of the whole chain. Thus, analysis of supply chain efficiency should be based on its graduation from global ratings to the partial assessments concerning overall resource efficiency of the chain and the cost of tasks realization. 

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