Supply chain reliability

Market turbulence has increased. As a result, in 2011, 85 percent of companies experienced a major supply chain disruption. To drive resiliency and to improve supply chain reliability, companies must improve demand and supply sensing and drive dynamic decision making. 

The efficient supply chain. This supply chain is focused on the lowest cost/case. There are five characteristics. Demand and supply variability is predictable, volumes are high, supply chain reliability is high, demand-shaping activities are low, and the raw material costs are stable. 

In 2004, Scotts Miracle-Gro faced a crisis. Retailers were unhappy, sales were lagging, and on-shelf availability was an issue. Because of demand volatility (a combination of season, climate, weather, consumer preference and competifive behavior), Scotts traditional supply chain systems were just not up to the task of delivering the right product at the right time at the right place. The lack of supply chain reliability had become a major issue in their three major retail relationships Home Depot, Lowe s, and Walmart. This was significant. These three relationships represented more than 80 percent of the company s channel volume. 

The supply chain reliability is evaluated by the fill rate... 

Drive greater coordination among supply chain participants Improve supply chain reliability and costs Increase effective service... 

If both the farms and the dairy are covered by a reliable control system, the everyday monitoring will take place at the optimal CCP at the farm and analysis of milk samples at the dairy will only be needed at low frequency for verification of the system (Principle 6). This will ensure that there are no antibiotic residues in the milk sold by the dairy, with minimal expenses for control. In fact, the most expensive item will be the cost of the unannounced inspections at the farms to monitor the integrity of the system. However, if not all the farms are covered by a sufficiently good control system, the dairy will have to add the extra costs of its own independent system, in order to be able to take responsibility for this quality aspect. So the main benefit of a supply chain-based system is that it provides full control at the lowest cost. The main drawback is that the more entities that are involved, the greater is the risk that one of them will experience a system failure and this can have disastrous consequences for all those other entities that rely on the defaulting entity for their product control. 

Corporate management systems in the areas of environmental protection, employee protection and consumer protection should be integrated further to avoid a shift in risks and also to save costs. All areas require reliable and systematic data about substance properties and application-related exposure. Mechanisms are also required for effective dialogue along the supply chain as well as between companies and authorities. In addition, the comparative assessment of chemical products (for example, in purchasing or in product development) can only be done intelligently if all essential risk areas are included in the evaluation. 

This comprehensive approach allows for efficient integration between processes, different phases of product life cycle, and integration between different sites in the supply chain. This integration provides opportunity for efficiency in that process owners are integrated with each other s needs and expectations. Duplication of effort is avoided and efficiencies gained. Quality outputs from one process become reliable inputs into the next process. Management and leadership will have access and insight into compliance, infrastructure, and performance metrics of all processes on a comparable basis. This provides leadership the opportunity for risk-based resource allocation to appropriate areas of the enterprise. 

In order to connect remote energy resources new supply chains are needed. Quite often this implies the constructions of new main pipelines through transit countries, with increased reliability. The reliability of main pipelines is connected to various risks that may cause failure, or promote the termination of system functioning. The fundamentals among them are the following main risk elements ... 

Technical aspects of gas pipeline transport 379-380, 395-396 Reliability of gas pipelines 397-403 Fossil fuels pipeline transport 371-379 Planning and logistics for gas supply chains 384-390 Environmental aspects and protection 66-71, 104, 177-180... 

Nevertheless, improving or even innovating SCM design and operations is a reliable way to boost ROIC and therefore market value, as supply chains link nearly all parts of a company s business system. When Dell developed its radically new supply chain model, it was really thinking out of the box , and probably no one would have believed it would soon become the reference in (and outside) its industry, and one of the biggest and most valuable players in its sector. Similarly, other industries have indicated ways that the chemical industry can take in the near future. 

The new chemical industry will have two main types of companies. The molecule providers will focus on delivering commodity and fine chemicals at the lowest cost. These will require all the traditional skills associated with chemical engineering with a particular emphasis on supply chain and logistics optimisation, plant efficiency and reliability. The problem solvers will provide customised effects. Whether these are speciality additives or personalised drug systems, the customer is more concerned with the efficacy of the product than with specification of the composition of the product. 

Promoting the sustainable development implies the availability of reliable measures. These measures should regard the complete manufacturing-supply chain over the predictable product life cycle. The metrics should be simple and understandable by the large public, useful for decision-making agents, consistent and reproducible. The sustainability measures proposed recently by Schwartz, Beloff Beaver (2002) have these properties. They refer to the same unit of outputs, for example the to the value-added dollar Fy4, defined as Revenues minus Costs of raw materials and utilities. The metrics that will be presented are consistent in the sense that 1) the lower the metric the more effective the process, and 2) all indicate the same direction. 

For solid dosage forms, scale-up is a major challenge and includes ensuring the bioequivalency of the clinical product to the commercial product. For proteins, shear-induced aggregation can be an issue, as well as establishment of a commercial supply chain that is robust, reliable, and able to deal with large amounts of temperature-controlled materials. 

Combined with the three leverage drivers of reliability, efficiency and logistic agility - sources of social, economic and environmental benefits - the eco-logistic lever strengthens the contribution of the supply chain to the social and environmental aspects of sustainable development. 

This figure symbolizes all the logistic supply chain components drawn from the Supply Chain Master reference model. To improve their logistic performance, companies have these drivers available dedicated to reliability. 

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. 

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