Internal Productivity Improvements Reduce Supply Chain Costs

Nov. 22, 2005
Using a synchronized demand strategy to redo its replenishment program, a manufacturing company was able to pull $350 million out of its supply chain. The solution involved re-engineering processes as well as developing contractual requirements to have ...

Using a synchronized demand strategy to redo its replenishment program, a manufacturing company was able to pull $350 million out of its supply chain. The solution involved re-engineering processes as well as developing contractual requirements to have suppliers deliver parts only when a customer order is logged. This is but one example from the 100 companies interviewed for the study "Supply Chain Management Best Practices" conducted by Best Practices, LLC, a Chapel Hill, N.C.-based research and consulting company.

A vendor managed inventory system helped another manufacturer reduce inventory levels from four weeks to two weeks, cut contract costs by 50%, eliminate 80% of its manual transactions, reduce its planning cycle by four weeks, increase capacity utilization by 30% and increase agility and responsiveness to customer demand and market change by an estimated 10%.

Another company was able to reduce the time necessary to push design changes through a product creation team by 70% using an information platform that connected all functions related to product creation.

For a summary of the report visit http://www3.best-in-class.com/rr629.htm.

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