Critical Sourcing

Companies continue to develop strategies to create both top-line revenue growth and bottom-line profitability growth through sourcing goods from often remote lower cost regions of the world. In today's economic climate this may well be important for companies wishing to improve their financial performance. However, when viewed from an operational standpoint the view can be at times very different. The speed with which companies moved to global sourcing over the past decade has resulted in a large number which fail in attaining the required visibility and control over their sourcing network. As it relates to improved operating performance, these companies do not always have the data amassed in such a manner that enables them to see the total picture. The old adage of “information is king” applies in this area because if you don't have the data, you don't know where you are going. The key here is to move at a deliberate pace and not allow your sourcing plans to get ahead of your systems capabilities.

MainStream fully supports the use of alternate suppliers as a strategy for supply improvement. The ability to identify the field of potential supplier relationships, including those suppliers which are not currently active, is advantageous when planners have the ability to model and appraise potential supplier changes. Depending on the scenario, all demand may be sourced to a single supplier. However, when the inevitable happens and demand increases, the planner may want to model dividing supply across multiple sources. Models can be built around various scenarios including a division of sourcing based on a percentage basis, on absolute quantities, or on supplier capacity.

In the end, more effective coordination of the outsourced supply chain whether local or global through a comprehensive supply chain model, will allow for improvements in growth and customer service while at the same time reducing risk and operating expenses.