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A STRATEGIC IMPERATIVE FOR MANUFACTURERS
Increase Inbound Supply VisibilityHow to Minimize Inventory and Expediting through Detailed, Real-Time Visibility to Inbound Inventory
Today, manufacturers must maintain a delicate balance
between sourcing from cheaper production sites and
minimizing excess costs that occur along the supply
chain. Often, the measures taken to lower supply chain
risk will cost more to maintain than the savings gained
by sourcing from an affordable region. Faced with this
dilemma, manufacturers must find another way to
lower supply chain risk and know the status of their
inbound inventory.
When there is a black hole of information during lead
time, companies will expedite inbound components from
suppliers via expensive air freight to guarantee arrival in
time for production. This strategy doesn’t do much for the
company’s product margins — it accepts as the norm a
blind, reactive approach to inventory management.
Holding buffer stock contradicts a lean inventory
strategy, but manufacturers do so to lower supply
chain risk. Again, the results encroach on the bottom
line; excess inventory and obsolescence cuts into
any savings that strategic sourcing accomplishes.
Impact of Poor Visibility
As global sourcing requirements cause increasing lead
times and extra buffer stock in the inbound supply
chain, customers experience high levels of delivery
uncertainty and lead time variability.
In this scenario, manufacturers are forced to deal with:
• Increased COGS from expedited air freight
• Increased net assets from excess inventory
• Delay in production if components do not arrive
on time
• Difficulty planning production around variable
delivery times
• Customer dissatisfaction due to poorly estimated
delivery date
The Root of the Problem
Traditional software does not capture the data needed to
give accurate delivery estimates to customers without
raising supply chain costs. Managers mitigate risk by
spending more money on back-up plans. This strategy
may keep production on track, but leads to other
problems.
1. Loss of visibility in ERP/MRP after material release
(order placement)
Often, supplier EDI (ASN) compliance is low. EDI
connections break when the supply base changes.
With low visibility, shipment ETAs are static — they
don’t change during a 20-30 day ocean transit
period. This causes:
• Completely unreliable information
• Material managers that are firefighting
• Massive air freight (7x$> ocean)
• Increased landed unit cost
2. Bad lead time assumptions in Materials Resource
Planning (MRP)
When reliable information is not available, lead
times are buffered and standardized to “be safe”.
By gradually increasing lead times, companies
suffer from:
• Inventory growth and increased obsolescence
• Increased variability and an amplifying effect
The Challenge
Global sourcing requirements are at odds with just-in-time practices.
Manufacturers need a way
to respond to volatile demand
without increasing supply
chain costs.
Companies with traditional software systems and EDI
networks have struggled to find a way to balance
increasingly complex global sourcing with lean inventory
strategies. The only way to avoid a reactive approach is
to shine light into the inbound supply chain. However,
manufacturers can only do this by moving their supply
chain into the cloud.
A cloud-based platform for supply chain management
brings to the table full visibility into inbound inventory.
This allows in-transit goods to be counted as on-hand.
Instead of expediting shipments of product at the last
minute via expensive air freight, supply chain managers
can easily view inventory that will be soon be available
and rely on the arrival of those shipments instead.
Truckers
Events
ConsolASN
ASN
Events
TransloadASN
Events
Consol Deconsol TruckerAir/Ocean
Pre-Carriage Line Haul Distribution
Actual DynamicETA
At-Risk Delay
PlantsSuppliers
Plan
Cloud brings everyone to one network and allows for dynamic ETAs.
Monitor inbound activity on a cloud-based network
of your supply chain partners.
• Marry order, shipment, and event data to provide an
accurate view of inbound flows and dynamic ETAs
• Handle complex, multi-leg intercontinental flows
(origin consols, destination transload/JIT warehouses)
How to use it for inbound supply chain visibility:
1. Identify “at-risk of shortage” exceptions
2. Evaluate transportation alternatives, expedite
where needed
3. Determine reliable “realized lead times” planning
in MRD
Value Propositions
The value of inbound supply chain visibility lies in
the power to operate an agile global supply chain.
In the cloud, processes can be streamlined and
decisions made based on accurate data.
1. Achieve greater supply chain agility in order to
profitably respond to volatile global demand
• Gain full visibility into inventory supply, fulfillment
alternatives, and cost tracking
2. Reduce net assets of inventory and obsolescence
• Increase delivery reliability and control of inventory
• Eliminate in-transit inventory by reducing “dead
time” at hand-over points
3 Reduce COGS by lowering expedited freight
• Eliminate 90% of costly just-in-case expedites
4. Realize better performance of supplier and
LSP providers
• Use strategic KPI scorecarding to evaluate partner
performance
Inbound Supply Chain Visibility Innovation and the
Networked Company
To shine light on the inbound supply chain, companies
must transform themselves from silo-based, inward-
facing corporate operators to interconnected, highly
agile business network orchestrators.
NetworkConnectivity
Agility
B
A
Sense more accurately
Operate more e�ciently
Respond faster
Make better decisions
The SolutionHow can just-in-time, lean production
methods work in a world where your
suppliers are 40 days and thousands of
miles away? When the typical fixed buffer
stock and expedited shipments costs too
much, how can you make sure you can
ship on time?
GT Nexus provides the cloud-based collaboration platform that leaders in nearly
every sector rely on to automate hundreds of supply chain processes on a global
scale, across entire trade communities.
Copyright © 2017 GT Nexus, an Infor company. All rights reservedgtnexus.com