Supply Chain Management & Logistics Integration
Recent scandals involving tainted peanut products, children's toys, and pet food serve as excellent reminders of how important a company's supply chain is and how disastrous mistakes can be for the company. In addition, these scandals have had a clear, negative impact on the purchaser of the products and indeed the overall economy.
At MainStream we define a supply chain as “a network that procures raw materials, transforms them into various forms of work in process, resulting in a finished product which is transported to customers through a distribution system.” Management of such a network requires expert knowledge and outstanding ability to optimize logistics that allow for a specific quantity of a particular item needed at a particular time and at a particular price. It is obvious that the relationships an organization has with the suppliers that make up these networks, and the associated integration of logistics support, are a central component of supply chain management and of critical importance to a successful company.
In today's business world it is a matter of practicality to have a defined supply chain strategy as a core component of a business plan. Engaging in sustainable supply chain management is a core “best practice” that management must implement to lower costs, increase revenues and drive customer satisfaction.
MainStream has worked with a variety of companies across a range of industries, helping them understand and implement how supply chain management sustainability fits within their product strategies.
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.
Inventory Management
During times of economic uncertainty, companies are actively seeking best practices for reducing inventory holdings throughout their supply chain. In fact, according to a recent study, 54% of respondents indicated that reducing inventory is the top action that their companies have taken in response to the recession. For many companies inventory is the biggest factor affecting their working capital levels. Companies are experiencing long lead times and significant volatility in demand, creating a greater awareness on managing inventory. In a period where cash management is so critical, inventory management is an essential element of effective short and long-term planning.
Identifying and implementing the best practices tools to accomplish inventory management is critical. Companies are looking for practical solutions to free-up working capital while sustaining customer satisfaction objectives. Sixty two percent of companies responding to the survey reported customer demand had dropped over the past year. This increases the importance of focusing on inventory if a company wants to avoid a spike in write-offs resulting from a build-up of goods that cannot be sold. Findings in the study show that 91% of companies indicate that they are involved in reviewing opportunities for improving inventory performance through process change. Another 61% of respondents say they have made, or have been asked to make, inventory-related technology recommendations within the past six months.
MainStream's operational expertise allows us to guide our clients through this critical process. We will provide you with experience in managing inventory throughout your supply chain to improve, customer service levels, forecast accuracies and to use technology to build models to better forecast demand, inventory segmentation, inventory optimization, inventory replenishment and extended inventory visibility.
Multi Division Integration
Many businesses are starting to explore the concept of a multi operation/division supply chain organization and are challenged on how to create and manage one effectively. The goal of the organization should be to act as a value chain and to provide positive contributions across business divisions, functional departments and sectors.
Companies typically include delivery, planning, and sourcing in their supply chain organizations, but somehow fail to include functional departments that may be higher-value added activities. In today' global marketplace businesses need to include the customer management capabilities, product launch teams and those that supply post-sales support as key contributors in the supply chain family.
When properly assembled and sanctioned, a supply chain organization can carry out all of these functions, and lead an organization in achieving satisfied customers, greater revenues and higher profits. When limited in scope, many companies shortchange the overall performance of their supply chain organization.
MainStream has the operational expertise and knowledge to help guide your company through the development and implementation of a value creating, multi division, supply chain organization. We can quickly help you model and analyze value chain scenarios customized to your specific set of circumstances.
Lean & Six Sigma Services
Both Lean and Six Sigma were developed when the pressure for increased quality and speed were placed primarily on manufacturing functions. The Lean discipline rose as a process for optimizing automotive manufacturing, while Six Sigma was developed as a quality initiative aimed at eliminating defects through a reduction in process variations within the semiconductor industry. Not surprising is that early adherents to Lean Six Sigma came from service support functions of large manufacturing organizations like GE, Caterpillar and Lockheed Martin where supply chain management is viewed as critical to long-term value creation.
Lean Sigma for supply chain services is a business improvement process that maximizes value by achieving the fastest rate of improvement in customer satisfaction, cost, quality, and process speed. The combination of Lean and Six Sigma improvement methods are required as Lean cannot bring a process under statistical control and Six Sigma by itself cannot noticeably improve process speed or reduce invested capital. However, when combined they enable the reduction of complexity and cost which is an objective of all parties associated with supply chain management. In short, what sets Lean and Six Sigma apart from each particular component is recognizing that at the end of the day it's not just about speed, nor is it just about quality. Organizations need a balanced methodology that takes into account the voice of the customer and focuses the organization on improving quality, within a set period of time.
MainStream views the blending of Six Sigma and Lean as a winning initiative rather than competing initiatives. Lean enthusiasts note that Six Sigma pays little attention to anything related to speed and flow, while Six Sigma supporters point out that Lean fails to address key concepts like customer needs and variation. In this case, both sides are right. Let us show your organization the variety of ways you will benefit from the use of both of these powerful tools.