The supply chain is the backbone of every manufacturing organization. It drives what, when and how much of a product is purchased, produced, distributed and ultimately sold. It also involves forecasting and planing the production of inventory, a manufacturing organization's most significant expense.
You may have heard the theory that "every action causes a reaction." This is especially true when any of the interrelated processes that comprise a supply chain are affected: Any positive or negative action impacting one or more of these processes will influence other activities within the supply chain, thus altering the daily operations and, eventually, the bottom line of a corporation.
A positive impact would contribute to the overall goals of the supply chain, such as when raw materials arrive and orders are shipped on time. A negative impact would result in an unplanned reaction that disrupts the supply chain, delaying or even impeding the goals of the corporation.
- A marketing manager's sudden change in a product sales forecast might have a dramatic impact on inventory levels and production.
- A manual override in the materials requirement planning (MRP) schedule could cause significant back orders and threaten a company's relationship with its customers.
- A late delivery by a supplier could affect schedule and production efficiencies.
- An expired purchase order could cause inventory shortages and strain supplier/partner relationships.
- Any changes made to safety stock levels, the amount of inventory that must be available at all times for minimal disruptions on production, could affect the bottom-line profitability of a corporation.
Ensure the Efficiency of Your Supply Chain
Many corporations have invested in technology to help ensure that their individual supply chain functions, such as procurement, production planning and inventory management, are productive and efficient. However, these organizations have quickly discovered that implementing a successful, integrated supply chain system can be extremely complex and expensive.
Further, many companies are combining their supply chain system implementation with an ERP solution warehouse management, shop floor control and others. While these ERP solutions help support integrated processes and transaction data capture, the breadth and depth of key management performance measures that must remain optimized is beyond the scope of what can be effectively identified, analyzed and acted upon. As such, it has become increasingly important to monitor these complex technology solutions through a balanced set of measures to accurately assess how well they are working together.
In a global or multisite manufacturing environment, the opportunity for supply chain inefficiencies increases exponentially. By establishing a comprehensive monitoring process, companies will be able to detect these inefficiencies before they negatively impact the supply chain and cause serious repercussions.
Data Warehousing and the Supply Chain
A data warehouse provides, in one central repository, all the metrics necessary to support decision making throughout the supply chain. This supply chain data warehouse should include metrics and related analytics to offer support in the following areas:
- Order processing
- Customer service
- Scheduling and planning
- Finished goods inventory
- Raw material inventory
- Quality control
- Efficiencies and costs
As the data warehouse captures more and more information, new business rules can be developed and refined to constantly monitor and correlate key operating metrics to proactively search for actions in one function that may cause negative reactions in another function. Enabling these business rules will yield a more connected and informed user audience.
Some examples of the kinds of information a data warehouse can provide about the supply chain are:
- Customer scorecards
- Vendor scorecards
- Manufacturing efficiencies and variances
- Scheduling accomplishments
- Forecast error rates and change history
- Projected excess or inventory shortages
- Projected or actual inventory warehouse distribution issues
- New customer back orders
- Procurement irregularities
Organizations now have access to solutions that help them capture these cross-functional supply chain business metrics within a single repository and have them readily available to support decision making. These solutions can proactively deliver supply chain information and automatically alert users about any variances before they can cause disruptions. Companies can maximize return on investments in disparate systems by getting an integrated view of their entire supply chain.
Web-Enabled Data Warehousing Solutions for Supply Chain
Another important application of supply chain data warehousing is supporting a company's e-business strategies. Information architectures required to enable both business-to-consumer and business-to-business e-commerce should contain a data warehouse linking the front-office (customer systems) with the back-office (supply chain) systems.
An e-business-enabled data warehouse focused on supply chain metrics and actions can yield tremendous value to the daily operations, business analysis and financial bottom line of a corporation.
A Flawless Supply Chain: A Key Strategic Advantage
More and more companies are utilizing the Internet and integrating their supply chains to become more competitive in the marketplace. To fully enable these strategies, a data warehouse must be developed to collect the metrics used to summarize and analyze the information "locked" within the operational systems. This will help organizations become more proactive in using this information to gain a real competitive advantage.
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