Supply Chains need to be more responsive

There are continuing calls for productivity improvements across the UK’s manufacturing sector. Concerns and associated initiatives around this discussion have been ongoing for some time bearing limited gains.

While there are numerous factors that limit this measure, part of the challenge must stem from a lack of collaboration and alignment between participants providing products to their end users on time. The attention of tier 1 suppliers together with their upstream supply chain partners is often overly focused on efficiency with little attention being placed on how responsive their customers need them to be.

Smaller manufacturing organisations often rue the idea of holding inventory and even become averse to goods being delivered a few days earlier than planned. Due to this approach, each supplier is focused on their own profit, and not the supply chain surplus. This extreme lack of responsiveness towards their customer limits productivity levels across industries.

To achieve the responsive level customer require, while being as efficient as possible, relationships with your supply chain partners are no longer just a priority, they are now a precondition for success. High levels of ‘social capital’, relationships within and between groups form trust and create the strong foundations which improvement initiatives can build on. 

What determines the need to responsiveness in the supply chain?

There is an element referred to as implied uncertainty. While the uncertainty of demand is around whether the product will be ordered by customers in the next period, implied uncertainty of demand refers to the challenges that exist in meeting the needs of each customer segment. Implied uncertainty is higher when market sector requirements include certain factors which include:

1. Wide ranges of items are sought in this market segment.
2. Short lead times required by the market segment.
3. Wide ranges of quantities demanded across periods.
4. The need to create highly innovative products.
5. Meet a high service level.
6. Handle a volatile level of supply uncertainty.

The greater number of these factors required by your market segment raises the level of responsiveness required from your supply chain. However, responsiveness comes with a cost.

It stands to reason that key strategic choices for any supply chain must include the level of responsiveness it seeks to provide.

When all supply chain participants are focused internally on maximizing their profits with little regard for meeting customer requested dates, the risk of customers sourcing globally increases.

While there are many avenues available for manufacturers to improve their level of response to their customer needs, working closely with your supply chain partners is essential.

Coterie SCM have been assisting companies in raising their level of response in meeting market segment needs while optimizing inventory holdings across the supply chain. 

If you are interested in discussing how we could assist your team in raising your customer service levels on a consistent basis, contact us to hear what options exist across your supply chains. Find out more about Coterie and how to contact us at www.coteriescm.com.