Monday, April 10, 2006

Toughening up the chain .. by Susan Tsang

Supply chain management (SCM), which holds the promise of reducing supply costs and raising product margins, is becoming even more of a necessity as technology develops.

SCM is the planning and execution of supply chain activities to ensure a coordinated flow both within a company and with integrated companies.

The advent of the digital age has powered business to Internet speed. Buyers go online to surf the world in search of what they want, at the best prices. Retailers are racing to keep up with consumers.

Manufacturers no longer have the luxury of taking years to develop, market and sell their products. For instance, mobile phone makers have seen their design cycle shrink from 18 months to just 6 in the last few years.

As customer preferences and demands shorten the lifecycle of a product, manufacturers have to produce shorter production runs to ensure minimal inventories in the supply chain to reduce product obsolescence.

Further complicating matters is the evolution of the manufacturing process itself, which is becoming more global in terms of suppliers and customers. As manufacturing becomes more diverse and spreads across countries, both from a production and distribution perspective, manufacturers require improved visibility and real-time information if they are to successfully manage the supply chain and respond rapidly to market and customer demands.

Manufacturers in the region are still adopting traditional SCM products in areas such as supply chain planning, factory scheduling, demand forecasting, transportation planning and warehouse management.

However, as they find themselves having to respond quickly and provide information in collaborative environments, manufacturers realize that improvements are needed within their own operations.

Venturing beyond traditional SCM products into new areas of:
1. supplier collaboration
2. customer collaboration
3. radio frequency identification (RFID)
4. product lifecycle management (PLM); may be in the offing.

Pranav Kumar, research director of enterprise application software, with research firm Gartner Asia Pacific, estimated that collaborative planning applications, which enable the sharing of planned demand or supply data with trading partners, will take two to five years to realize its

With RFID, where tags attached to pallets, boxes or items enable
objects to be tracked throughout the supply chain, Pranav projected that it
will take 5 to 10 years before it becomes pervasive.

A very exciting innovation for the manufacturing industry is is PLM. Such systems tie everything together, allowing engineering, manufacturing, marketing, and outside suppliers and channel partners to coordinate activities.

PLM is a process that leverages product information to guide products from concept through retirement. The software makes use of product information and business analysis to support the product’s portfolio strategies, lifecycle planning, activities management, and the execution of the activities through each phase in a product’s life.

By providing a unified collaborative environment, PLM enables the collective knowledge of the extended enterprise to add value at any stage of a product’s lifecycle.

PLM allows downstream players to participate in the earliest stages, which can determine up to 80 percent of a product’s development cost. It can manage all of the intellectual capital to support the entire product lifecycle, including product, process, resource and supplier


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