Supply chain improvements coming slowly
By Staff -- Modern Materials Handling, 12/1/1998
Product delivery times and quality are becoming as important as cost in the consumer products supply chain. However, progress toward universal improvement of supply chain practices is spotty at best.Those are two of the top-line conclusions from the recently released best practices survey of the consumer products supply chain. The results were presented at the Council of Logistics Management conference by James B. Rice, Jr., of MIT's Integrated Supply Chain Management Program and Michael Tarr of KPMG Peat Marwick.
The study focused on manufacturers and retailers. A full 25% of respondents were Fortune 500 companies.
As many companies pursue new supply chain efficiencies, 39% reported during the past year a significant increase in inventory turns and reductions in cycle times and costs. Inventory levels had declined at 42% of respondents.
On the other hand, the survey found a wide variance in cycle time averages and low usage of just-in-time practices. Many retailers do not use common techniques such as crossdocking and customer direct shipments.
Information technology use is generally less than state of the art with retailers lagging behind manufacturers.
As a leading information technology, electronic data interchange (EDI) use shows mixed results. On the plus side, companies using EDI have trimmed cycle times. And supply chain satisfaction measures were higher for companies using the technology. However, EDI appeared to have little impact on production lead times and costs.
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