Having the right forecasting tools and other supply technologies is the best path to profitability, according to a survey if industry executives conducted recently by Bloomberg Business Research Services.
Because customers are demanding more and an increasing number of businesses are looking at global markets, the demand for accurate forecasting and planning software has become critical for the success of most companies, according to a report, entitled “Supply Chain Innovation Driving Operational Improvements”, which was based on the survey’s results.
“We Need Accurate Information Faster”
BBRS asked chief executive officers, company presidents and other high level corporate leaders what they saw as the best ways to cut costs, improve product quality and increase profitability. The response was nearly unanimous: To make the best decisions for their businesses, leaders today need the most accurate and timely information available.
In fact, many respondents said that existing tools aren’t fast enough or accurate enough to give them the key data they need and that more money needs to be invested in innovation to speed up the flow of information.
“Demand-driven supply forecasting/planning leads all supply chain tools in level of importance and level of adoption,” the report stated in its executive summary. “Clearly, getting this task right is seen as key to supply chain management.”
Among the tools corporate decision makers currently use are warehouse management systems, multi-level inventory optimization, demand signal repository, salesand operations planning, and leveraging point of sale data.
Shifting to Mobile Access
Access to supply chain and tools is also now shifting to mobile devices. About 51% of the respondents said they expect their employees to have access to demand and supply chain forecasting/planning data via mobile devices by the end of this year.
One of the executives who participated in the survey — Jim Keppler, vice president of integrated supply chain and quality for North America at Whirlpool Corp. — said that the days of depending on data that is weeks or months old or even “guesstimating” based on previous experience, market trends and intuition are over.
“Our ability to forecast is critical,” Keppler said. “The accuracy throughout is important. Our goal is to have our appliances in the right time for the right cost.”
At Whirlpool, integrated systems tie together manufacturing plants and the supply chain all over North America, providing end-to-end visibility that enables real-time in-the-pipeline delivery systems.
Costs Shifted from Fixed to Variable
Since the company migrated to an integrated supply chain model three years ago, it has been able to shift between 3% to 4% of fixed costs to variable costs, according to Keppler.
“We focused on inventory reduction, while still being able to serve the customer,” he said. “As we’ve taken inventory out of the system, we have been able to consolidate warehouses and reduce total warehouse space.”
The resulting traceability has given Whirlpool a 360-degree view of its customers, so when salespeople are calling on clients, they have easy access to the same product and order fulfillment information as everybody else in the company.
That ability to react to real-time supply chain data has made Whirlpool more productive and more profitable.