After you have the proper foundations in place, real Supply Chain elements need to be considered – so that your customers, your suppliers, and you all reduce inventory. This "across the chain" inventory reduction is where the major economic benefit is seen

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Initiating Supply Chain Management

The Supply Chain Management benefit is reduced inventory "across the board". Oftentimes this requires substantial changes in the customer – supplier relationship where each views the other as a partner.

Once you have all the fundamental steps in place, it is time to determine which level of supply chain you need to implement.

The major levels can be summarized as:

1. Automatic Rebid and Restock when inventory reaches the reorder level – These systems automatically calculate the time when raw material inventory reaches the reorder level based upon both current inventory AND production demand. Before this critical reorder point is reached, approved suppliers are contacted via e-mail for bids. On more sophisticated systems, the suppliers respond on your secure web site and the response data is automatically sorted and the purchase order automatically generated. These automation elements reduce the time associated with bidding and result in lowering the reorder level.
2. Automatic Resupply System – These are most useful for critical materials supplied by one supplier. Much like the Automatic Rebid and Resupply, the supplier is contacted when the forecast inventory level reaches the resupply point based on inventory level and production demand. There is no bidding in this process as that was previously addressed.
3. Supplier Driven Resupply – This applies to a select supplier who has been enabled to read inventory levels of and production demands for materials he supplies you. Based upon this information, he manufactures and delivers as needed, thereby eliminating his finished goods while assuring you of raw materials.

Now it is time to initiate Supply Chain. Select a critical few items, using the Pareto Principal, and start with these – rather than trying to address all elements. Determine the appropriate Supply Chain element (or variant of those listed above) fits. From there, develop systems to deliver the information and coordinate its implementation with your suppliers and customers. 

Notice that this system requires information that is often contained on different computer systems. For speed and efficiency, integration of this data to provide meaningful information is required – and replacement of functional systems solely to achieve this integration is to be avoided.

After the initial elements are launched, expand to either additional materials, additional suppliers or customers, or to more sophisticated efforts as is cost effective.

While the above may appear to be time consuming the initial positive, cost effective results can be seen in within 3-9 months if the foundation is in place. 

Partnering with a capable E-Business supplier, who prefers to build upon rather than replace core systems, will accelerate this process dramatically.

To determine your current situation, where to go next, and how to get there, contact us for a no obligation, no cost initial consultation.

Gene Bohn 
E-Commerce Technology – Michiana, Inc 
574 848 9386 
gbohn@ectmichiana.com

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