Dave Blanchard Reports on Industry Week Best Plants 2013 Conference on MHLnews.com
Dave Blanchard, Editorial Director/Associate Publisher of Material Handling and Logistics, reports on the demise of the term “supply chain” and the rise of “supply networks”.
The term supply chain management has been around for more than 30 years, but according to Rob Barrett, managing director, supply chain & operations with consulting firm KPMG, its days are numbered. “The supply chain as we know it will be dead within the next five years,” Barrett predicted at the recent Industry Week Best Plants 2013 conference, held in Greenville, S.C. Now, before you jump to conclusions and assume he was only saying that because he was hoping for a new job title on his business card, here’s what he said after that provocative statement: “What we’ll be talking about soon won’t be supply chains but supply networks.”
Richard Dean, chief marketing officer with One Network Enterprises and Barrett’s co-presenter at the Best Plants show, pointed to Del Monte Foods, a $3.7 billion processed food manufacturer, as an example of a company that’s adopted demand-driven inventory planning and replenishment practices throughout its extended supply chain. Del Monte’s retail-centric supply chain of 3,500 SKUs includes more than 1,300 growers, 41 manufacturing and co-manufacturing locations in the U.S., 10 strategically located distribution centers and more than 5,500 ship-to-locations.
Del Monte’s goal was to improve its level of customer service. The way it chose to get there was to use downstream data and store-level demand to significantly reduce the amount of inventory its retail customers needed to carry to prevent stock-outs. That meant Del Monte had to shift from push to pull processes, which resulted in an improvement in forecast accuracy by more than 400 basis points. In fact, eight of its retail customers have reduced their inventory levels to the point they have achieved “negative working capital.”
Read the full article: A Supply Chain by Any Other Name Still Works the Same