A recent survey of resource management professionals in the manufacturing industry conducted by the Educational Society of Resource Management found that two-thirds of manufacturing firms are unsuccessful at synchronizing their supply chain operations with partners. This failure rate occurred even though 9 out of 10 manufacturing firms believe supply chain planning tools would help them with their synchronization needs. Why the disconnect?
Shoaib Abbasi, the CEO of Strategic Systems International, a supply chain optimization company that is working with U.S. Steel, Newsweek and Weyerhauser, cites three common reasons supply chain synchronization efforts with partners fail:
- Force-fitting enterprise resource planning (ERP) solutions into manufacturers' supply chain systems This forces manufacturers to make their business rules and attributes fit the ERP systems instead of the ERP systems fitting the manufacturers' business rules and attributes. Thus, the unique needs of the manufacturer and its partners aren't met.
- Manufacturers bite off more than they can chew Manufacturers often try to implement supply chain optimization tools in one huge rollout, alienating those very people on the shop floor who will use these tools. Those people should enter the implementation process very early so their insights and requirements drive development, Abbasi says. Then they need to phase tools into the enterprise based on prioritized needs. If a manufacturer feels its first priority is to control costs, it should consider a supply chain optimization tool first. If instead a manufacturer feels it first needs to improve its understanding of projected sales based on current and historical orders, customers and product demand, it should start with a demand forecasting system.
- Process manufacturers use supply chain management (SCM) solutions designed for discrete manufacturers Discrete manufacturers, who assemble components to make finished products such as televisions and computers, rarely face issues such as limited product shelf life and variations in the quality off raw materials. By contrast, process manufacturers like U.S. Steel or Weyerhauser, who perform several steps such as mixing and trimming before a product reaches its "finished" state, strive to maintain 100 percent capacity utilization. This causes the demand for perfection in supply chain planning to increase exponentially.
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