According to Gartner, the typical company provides support services and parts for an average of more than seven years after an initial product sale. In the U.S. alone, consumers and businesses spend more than $700 billion per year on spare parts and services. Additionally, the aftermarket parts and service industry has profit margins as much as 10 times those for initial product sales, and post-sale service is key to securing customer loyalty, fostering the company brand, and maintaining competitive differentiation. [..]
Estimating future demand is one of the most fundamentally valuable, but frustratingly difficult, challenges in supply chain optimization. By “Demand Forecasting,” I mean the effort to increase forecast accuracy and customer service levels through better perceiving, predicting and shaping the full range of factors that determine how well your product portfolio satisfies market needs. No other aspect of supply chain optimization has greater impact on profitability.
Not all wholesale distributors think in terms of supply chain optimization—but they should. Faced with growing costs, demanding customers and paper thin margins (net margin is often under 1%), supply chain management often separates successful distribution companies from those that constantly struggle.
Bryan Ball, vice president and principal analyst, supply chain management, Aberdeen Group, has outlined three rules to follow in his latest report, “Inventory Optimization - Impact of a Multi-Echelon Approach.” Rule 1: Always have enough. Rule 2: Never have too much. Rule 3: Never let Rule 2 overrule Rule 1
If you wake up one day in an industry where 90% of your products’ revenues are generated in the first three months, you don’t have enough historical data to generate an accurate statistical product forecasts, and your global sourcing and manufacturing networks create long lead times with high supply variability…congratulations, you have probably landed in the electronics sector.
Welcome to a business where turning out the next “must have” new product generates excitement and almost half of failures are due to initial misreads of market expectations. According to Gartner, [...]
One of our resident inventory optimization experts, Chris Russell, recently spoke with Greg Novitsky, global supply chain analyst at Celanese about the journey to optimize inventory. In this video podcast, Greg provides a veteran perspective on the multi-echelon inventory optimization (MEIO) journey and how Celanese has been able to reach the top of the MEIO maturity curve and achieve significant benefits.
This video podcast will be particularly interesting to supply chain organizations [...]
We work with a lot of branded and private label apparel manufacturers and brand owners, and it’s clear there is a misperception about supply chain complexity in these industries. Counter to what many people think, apparel supply chains are complex and demanding with global sourcing, long lead times, short selling seasons, and demand uncertainty. On the market side, it is extremely difficult to forecast changing fashions and fickle consumer tastes. On the supply side, we have hard-to-model constraints, costs, lead times, and vendor (maker) requirements.
Last week I attended the Sales and Operations Planning Summit in Boston. Attendance was impressive with more than 150 operations, supply chain, manufacturing and finance professionals from a wide range of industries. The conference's two-day, one track format was very popular, serving both companies who are relatively new to sales and operations planning (S&OP)[..]
Wouldn’t it be great if we could see around the corner, to posses that magical ability to anticipate what’s at the next intersection? On the road, we now have cars that can see around a corner, let you know what is ahead and prepare for any changes in conditions. You, the driver, are no longer[..]
VMI is back. While many have spoken of its demise, lately I have found myself engaged with customers, press and analysts about its resurgence. I also have an article set to appear in the Journal of Business Forecasting as well as a whitepaper on the topic, What You Need to Know About the New Collaborative[..]