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Professor Richard Wilding
As Chair (Full Professor) at the Centre for Logistics and Supply Chain Management and Director of the supply chain risk forum at Cranfield School of Management U.K. Richard Wilding works with European and International companies on logistics and supply chain projects in all sectors including pharmaceutical, retail, automotive, high technology, food drink and professional services to name a few. More...*
www.richardwilding.info
*Opens in a new window. Supply Chain Europe is not responsible for the content of external internet sites
Global Sourcing Report
"We already source from Asia, Africa, and central Europe. Why should we consider sourcing from Latin America? Even if there is a compelling case in terms of quality and cost, what would we need to know to do the job properly? Also how could we manage the supply chain risk?"
Make an informed business decision. This new Supply Chain Europe Global Sourcing Report is essential reading for senior managers and other professionals involved in developing and managing supply chain strategies linking Brazil and Europe. More...
It has been stated that “Competition is no longer between individual companies but between the supply chains they are part of”. With the increasing globalisation of supply chains this statement is being recognised as a harsh reality for many organisations.
Customers are increasingly taking low cost and higher quality for granted, and moving their attention to the availability of the product or service as soon as the need arises. This requirement has a knock-on effect right through the business environment, from the service/retail end supply chain, and on to new product development requiring organisations to “design for effective supply chain management”. Business is being forced to become much more agile and responsive in adapting their products and processes to changing market demand.
Leading edge companies have recognised that competitive advantage can only be gained by understanding the time dimension of the supply chain and applying time compression techniques within the design and operation of the supply chain processes. It has been found that by focusing on time in the supply chain the cost issues tend to look after themselves.
In order to survive, companies need to provide more value for less cost in less time, i.e. increase the proportion of “adding value” time in the total supply chain process. This of course can be difficult when we consider that the typical “cash to cash cycle” (i.e. purchase of raw materials to receipt of money from customer) increases from 8 weeks for locally sourced items to 19 weeks for globally sourced items, so the trade off between “purchase cost” and “lead-time" needs to be continually assessed.
The old marketing adage states: ‘customers don’t buy products they buy benefits’. The importance of time in the value perception of customers is becoming increasingly important. The contribution of time in reducing costs can also be demonstrated. Thus time compression increases competitive advantage on both sides of the equation, i.e. by reducing costs and by gaining competitive advantage.
So what sort of deliverables can you expect from focusing on time? Specific achievements can include:
- Quality improvements of 60% to 80%
- Productivity improvements of greater than 50%
- Inventory reductions of 50% to 80%
- Development time reduction of 50% to 75%
Surveys of companies involved in time compression projects have produced the following type of subsidiary benefits:
- Creating a time-based perspective of the entire business process
- Validating and prioritising the opportunities for change
- Achieving total supply chain transparency through time-based measures
- Enabling agility within all systems, and improving customer satisfaction
Also, in 50% of instances the above deliverables will be a catalyst for the following:
- Solution generation for the problems/opportunities identified
- Identification of programmes for change
- Identifying skills gaps in the organisation
- Empowering people and generating enthusiasm for implementation
- Immediately enhanced profits
So within the supply chain should we not pay more attention to time? As Henry Ford stated in 1926, “Time waste differs from material waste in that there can be no salvage.” It can be argued that by focusing on time the other resources in our business will look after themselves, resulting in increased value and reduced costs.
