Supply chain management was supposed to promote greater coordination across supply chain functions. But corporations still continue to manage individual stages of the chain in isolation—creating waste, redundancy and unexpected costs. So how can these problems be solved?
Today’s supply chains tend to be compartmentalized, with a focus more on discrete supply chain functions than on the big picture. This may lead to savings in the smaller functions but losses in the big picture.
Too often, companies fail to realize that decisions that affect one area of their supply chain can lead to waste and inefficiency in another. For example, the marketing department might decide that a product’s packaging should be “green.” But when that packaging is implemented, it can’t withstand the impacts of the company’s
distribution process, and a large percentage of products are delivered with damage. Now the repackaging process needs to start all over again, at great expense.
When there is no or little communication between the individual functions, such as packaging, distribution and freight management, these breakdowns can occur. And often, these sectors outsource to separate service companies in an attempt to lower costs, further impacting the lines of communication. So each of these areas might see lower costs, but the lack of centralized coordination often leads to waste, duplication of efforts and missed savings opportunities overall.
A Total Solution
One solution is to coordinate every step of a product’s life in a systematic integrated way, from purchasing, manufacturing and marketing/sales, to packaging, distribution, returns processing and even liquidation. This is called Product Lifecycle Logistics.
A holistic approach for planning, conducting and evaluating supply chain operations, Product Lifecycle Logistics requires your supply chain managers to understand the interrelationship among discrete functions, so your company can achieve maximum, sustainable efficiency. It can reduce your supply chain costs by 10% to 20% percent by making your company:
- Smarter. You’ll be able to make faster, better informed decisions if you can access and analyze information up and down the supply chain.
- Faster. When you combine process steps and supply chain functions, you’ll reduce both touch points and cycle time.
- More agile. You’ll be able to respond more quickly to changing market conditions when you coordinate actions throughout the supply chain.
- Greener. When you have a faster cash cycle, you’ll see reductions in inventory, freight moves and even carbon emissions.
Supply chains have become global, complex and more difficult to manage. Do you have the kind of supply chain leaders who can see the big picture and use those insights to make more informed, profitable decisions? If not, call ZDA Supply Chain Recruiting in Denver. We can help you bring the right management on board.