All the above mentioned complexities are time consuming and cost huge money to supply chain. Customers of FMCG products want right product, in the right place at the right time and at the lowest possible cost. Organizations can use this data initially to determine where to focus supply base rationalization efforts.
Companywide costs of complexity include increased manufacturing downtime, working capital being tied up in excess inventory, and challenges across procurement, warehousing, and forecasting.
Volume spent with various suppliers. This increase in the number of distant suppliers adds to the complexity of supply chain.
Degrades material handling system performance. This increasing demand for different raw materials has led to the large number of suppliers supplying to one company. As trend of managing complexity increases, complexities of global supply chains will reduce and lead to the following developments — 1 Reduction in number of sub-optimized global supply chains 2 Increase in globalization to take maximum cost advantage through cheaper sourcing 3 Better access to lucrative global markets 4 Reduction in lead time and more scope for further globalization of supply chains 5 Improvement in information flow globally across supply chain 6 Improvement in the reliability of global suppliers 7 Improved performance of global supply chains Related posts: Keeping track of stock with large number of SKUs is a complex task.
This increasing demand for visibility across the supply chain will put too much pressure on existing IT infrastructure and lead to huge investment in new IT technologies in supply chain to manage complexity.
Effects of complexity ripple throughout the organization, affecting the length of production runs in manufacturing, the proliferation of different channel and customer requirements in sales, and the number of suppliers that the procurement department manages, for example.
These costs are felt not just at the level of the SKU but throughout the business. But the most fundamental problem is turning strategic intent into concrete, systematic action.
All this has made transportation planning very complex. Managing complexity can be explained clearly with the help of following trends- 1 Increasing Number of Products and Services: February 01, By Lisa H.
Overall, we can execute on product demand cost-efficiently—and we have better visibility. Each step and paperwork requirement creates an opportunity for defects, leaving overall supply chain performance at the mercy of individual actions.
SKUs plodding along with low margin AND low sales turnover cannot be worth the cost and effort of maintaining them, can they?
Any inefficiency in the supply chain will lead to disastrous results.
Difficulties in quantifying the costs of complexity can also prevent discussions from even starting. Rationalizing Suppliers Supply base rationalization offers another opportunity to reduce complexity.
This cuts out events and reduces processing. Clogs the supply chain. Process complexity is a direct result of the number of steps and inputs required to complete a process. Chocolate manufacturer Ferrero U.
Performance based logistics is the newly developed concept currently being used by U S Department of Defense to handle complex logistics issues.
But one of the problems with narrowly focusing on rationalizing or cutting the tail of a SKU portfolio is that SKUs account for only a small proportion of complexity costs.Managing Complexity for Superior Value September 10, By Aaron Brown, Jeff Gell, Elfrun von Koeller, and Jeff Wray Working in collaboration with the Grocery Manufacturers of America (GMA) and its membership, The Boston Consulting Group (BCG) conducted extensive benchmarking on topics related to effective supply-chain management.
FMCG SUPPLY CHAIN MANAGING COMPLEXITY “Managing Complexity”: Managing complexity can be explained clearly with the help of following trends- 1) Increasing Number of Products and Services: With the increasing consumerism and competition among the organizations to attract more and more customers, customer has become more demanding and.
Supply Chain Management in FMCG Industries.
Introduction: Supply chain management was a term invented by Keith Oliver, a consultant Designing and Managing the supply chain Concepts,Startegies and case studies.
New York; Irwin McGraw Hill, Second Edition,pp requirements of the fast moving consumer goods (FMCG) and retail supply chains and understand the complexity of managing data integrity and alignment 6 Supply chain in a digital world: Technology investments are driving the supply.
Free Essay: FMCG SUPPLY CHAIN MANAGING COMPLEXITY “Managing Complexity”: Managing complexity can be explained clearly with the help of following trends- 1). Managing increasing numbers of suppliers in a supply chain is a complex task. 3) Global Sourcing: With the increasing globalization and pressure to reduce cost, companies are looking for cheaper sources of materials globally.Download