Companies can see the business benefits of optimising
their supply chain infrastructure in as little as four months,
according to AMR Research.
A report, Insights into Supply Chain Innovation in Europe -
published today (25 April) at the analyst firm's European Supply
Chain Conference - has found that businesses can achieve a fast
return on investment for relatively little outlay.
AMR Research's supply chain optimisation concept, the Demand
Driven Supply Network, relies on improving the visibility of
customers and the need for a single view of data.
Among the end-user companies featured in the research, AMR found
that processes were built from the "outside-in". They are based on
a clear view of the customer, what is important to the customer,
and the requirements for account profitability, according to the
report.
"These companies become zealots on new product introductions and
using their supply networks to shape and respond to demand," AMR
said.
With projects costing as little as £103,000, AMR Research urged
users to look at supply chain optimisation.
The research found that businesses achieved clear, quantifiable,
short-term benefits. Along with the four-month payback, AMR
Research found that the businesses that took part in the study were
seeing an average reduction in finished goods inventory of
31.56%.
The companies AMR spoke to also achieved an average improvement
in on-time performance of 27.5%. And the average margin of
improvement was 3.68%, according to AMR's data.
In the paper AMR noted that successful projects required strong
collaboration between participants and a process and organisational
focus.
In terms of collaboration, AMR said users need to focus on
project definition, funding and technology providers.
Getting data right was a key step in supply chain optimisation,
according to Nigel Montgomery, director of European research at
AMR. Without a single view of its data it was difficult for a
business to be more responsive to its customers.
AMR also urged users to embed the technology in their
organisation. The research highlighted the complexity of the
organisational and cultural challenges users face in optimising
their supply chains.
"By its nature, innovation is disruptive to organisations," AMR
said.
Of all the areas in which European companies face a challenge,
developing channel-driven fulfilment is the greatest, AMR warned.
Channel-driven fulfilment is the redesign of order processes to
become demand-driven, not order-driven.