Unlocking Supply Chain Profitability: Best Practices

by From the Top on 2013-05-10 01:54:34


Doug PasqualeThis is the first post in a series of three that will offer tips to help suppliers bring their products to market in a quicker, more cost-effective and profitable manner. Doug Pasquale, vice president, supply chain solutions division Ingram Micro Mobility North America, analyzes the entire product lifecycle and identifies cost-saving best practices that optimize the supply chain at each stage of the product’s life and shares tips on how to boost profitability.

Regardless of the market, every supply chain is challenged by today’s increasing demand for quick delivery. However, the connected devices industry may be the most pressed for speed as technology consumers want the latest gadgets at the snap of a finger and the “hottest” device can become old news in a matter of days. According to Ericsson, there will be 9 billion mobile subscriptions in the world by 2017. On the heels of Mobile World Congress 2013, scores of new devices from the biggest brands were launched and everyone is asking how these mobile devices will get to market quickly enough.

But suppliers are not only worried about how they can meet consumers’ demands for speed - they are also concerned with optimizing their supply chain to its full potential. The first step in doing so is to reduce logistics costs and improve time to market.

Location, Location, Location
There’s no two ways about it. Freight costs quickly burn a hole in a supplier’s pocket book and are the single largest cost within the supply chain. The mobile industry has quickly learned that the rule of thumb when choosing a freight partner is to look at what percentage of the national population that partner can reach by two-day ground shipping, regardless of whether the shipment is intended to reach the end-user, a retailer or a distribution center. Two-day shipping generally satisfies both time and cost sensitivities.

Another way to reduce logistics costs and expand profit margins is to align with an outsourced supply chain partner who is capable of consolidating the shipping volume across customers. This approach can also earn your company considerable discounts and add some weight back into your pocket book.

Clean out the closet
Why would an organization rely on a multiple inventory closet strategy where inventory is stored at multiple sites such as warehouses, distribution centers and containers? Housing inventory in numerous locations may be an attempt at reducing the risk of business disruption, like in the event of a natural disaster, but it is a proven way to increase inventory carrying costs and add another link in your supply chain. With today’s modern supply chain advances, companies no longer have to maintain these operational redundancies, which only drive up the cost of logistics.

Instead, look to consolidate inventory whenever and wherever possible. By leveraging an outsourced supply chain partner with Advanced Planning Solutions, customers can better monitor and predict channel demand, ensuring the right inventory is in the right place at the right time.  By doing this, you minimize lost sales due to out-of-stocks and won’t need to deal with costly excess and obsolete inventory.

Visibility from A to Z
Visibility is an essential element to running an optimized global supply chain. When you’re in the business of manufacturing, shipping and delivering goods around the globe you simply can’t afford to blindly guess where your product is in the long supply chain – and neither can your end-users. In the mobile industry, carriers demand the ability to track a mobile device at every point in the supply chain in real-time so they are able to quickly activate the device as soon as it’s ready for the end-user.

Leveraging a suite of reports and data feeds that offers the ability to see your product at any stage will allow you to quickly manage potential disruptions and re-route whether the product is in storage or transport. This is essential for any industry, but it is even more crucial for those dealing with hot market items like consumer electronic devices.

Global supply chains are growing longer and more complex, but following a few golden rules can unlock greater supply chain efficiency.

Doug Pasquale
Vice President, Supply Chain Solutions
Ingram Micro Mobility North America