SUPPLY CHAIN MANAGEMENT OF THE EXTENDED ENTERPRISE / LOGISTICS CHAIN MANAGEMENT OF THE EXTENDED ENTERPRISE.
Within today’s competitive environment, in which companies are under considerable pressure to reduce costs, enter new markets, optimise the level of service and develop new products, each manufacturer’s supply chain is being extended and becoming increasingly more complex.
The process of internationalising companies and “Global Sourcing” also generate the need to globalise the supply chain. This context, in turn, needs effective interaction and cooperation with suppliers, distributors and customers, thereby requiring command of the extended enterprise model.
Our experience at LKS shows us that on average, the sum of processes in the Supply Chain in extended enterprises takes up 50% of the employees in the company, accounting for 70% of its assets, and may even generate 80% of its expenditure. Indeed, companies have considerable potential for obtaining new competitive advantages if they are capable of significantly improving the performance of their supply chain.
LKS can help its customers to realise that improvement potential, designing strategies, implementing both physical and management systems and introducing organisational approaches that enable the company to provide the right product, in the required quantity, at the appropriate time and place for the lowest overall cost.
Local efficiency strategies
At this level, companies are focused on internal improvements striving to optimise individually the various functions involved in the logistics chain. Accordingly, attention is paid to such initiatives as operational efficiency, the development of applications for planning and optimising management and improving stocks and warehouses. Operational efficiency for improving capacity and enhancing the flexibility of the physical means of production, as well as for implementing suitable managerial processes for generating a seamless flow; the development of management planning and fine-tuning applications in production plants; and the improvement of stock and warehouse management in order to reduce the level of inventory at certain stages of the logistics chain.
Cooperation and integration strategies
Companies are evolving towards integration between the different functions and cooperation with suppliers and customers. The aim, therefore, is to introduce organisational approaches designed to fine-tune logistics processes, fostering the integration between the organisation’s various functions; further developing strategic management in purchases, considering the importance of the purchase volume in the end cost of products; working on the integration of the logistics activity within the company’s entire value chain, both upstream and downstream, including suppliers and customers; and concentrating on extending ERP to customers and suppliers, through CRM, SRM and applications that encourage connectivity.
Synchronising the logistics chain
The synchronisation of the logistics chain is the strategy that minimises the impact of complexity with a view to attaining excellence in costs and the level of service. This involves proposing such initiatives as the optimisation and simplification of the managerial process for reducing stock levels, upholding service and shortening reaction times; the structuring of the distribution network, with the aim being to do away with the middle ground and draw closer to customers; the implementation of information systems used in analysis and decision-making; and synchronising the ERPs of the global company.
Our solutions in Logistics Chain Management help to make significant improvements in such spheres as:
§ Improved quality of service to customers, in terms of compliance with agreed delivery dates and completeness of deliveries.
§ Increased flexibility, response time and capacity for adjusting to demand as a result of the reduction in management cycles and the specification of an operating system based on seamless flows.
§ Optimisation of stock management at the different stages of the logistics chain and the ensuing increase in the inventory turnover rate.
§ Heightened quality and the elimination of incidents (breakages to stock, obsolescences, returns, rejections and devaluations).
§ Reduction in running costs through an increase in output, a reduction in operating costs and in the financial cost of stockpiling.
§ Implementation of information and communications technologies that suitably favour integration and productivity.
§ Development of solutions promoting the use of open standards and protocols of connectivity and thereby enabling swift and straightforward transactions.
§ Access to emerging technologies such as web services and mobile solutions, grouping services and facilitating accessibility.