Wireless inventory tracking.

1
Buyer/Seller Trends

• Wireless inventory tracking.
• The business side takes charge of buying
  technology.
• Implementing lean principles in supply chain
  operations.
• Internal and external collaboration.

2
Wireless Inventory Tracking

• Radio frequency identification (RFID) tracking
  system for tiny chips or targets embedded in
  product, packages or containers.
• While bar code readers operate only on line of
  sight, RFID will pick up a radio signal from the
  chip from anywhere.
• Each product has a unique tracking number
  assigned in factory, allowing logistic firms to
  track products across supply chains.

3
The Business Side Takes Charge of Buying
Technology

• IT executives were
• Running technology selection process
• Making all key vendor selection decisions
• Did not get the return on investment they
  expected.
• IT selected projects didnt give the business
  units the value they needed.

4
The Business Side Takes Charge of Buying
Technology (Cont)

• Entire operating units had to change their
  business processes to the application rather than
  the reverse.
• IT built its business case for tech investments
  on productivity that a new piece of software
  would bring.
• Few of those improvements ever came to fruition.

5
The Business Side Takes Charge of Buying
Technology (Cont)

• Supply Chain Managers couldnt get the job done
  with its focus on transaction automation and
  error resolution rather than the value and
  usability of operating information.
• Once Supply Chain Managers have identified and
  analyzed their key business process, can see
  where gaps are and bring in technology as a tool
  to fill those gaps.

6
The Business Side Takes Charge of Buying
Technology (Cont)

• Companies are now starting to buy technology by
  focusing on
• Business processes
• Risk avoidance
• Accountability
• Very fast ROI

7
Implementing Lean Principles in Supply Chain
Operations

• More companies are looking at their operations
  using lean principles and concept.
• Are mapping value stream for each major product.
• Consists of all activities from
  forecasting/planning through invoicing/collection
  required to deliver products and services to your
  customers

8
Implementing Lean Principles in Supply Chain
Operations (Cont)

• Value stream mapping process may reveal, from the
  customers perspective, that a significant amount
  of non-value adding activities are embedded in
  your current processes.

9
Implementing Lean Principles in Supply Chain
Operations (Cont)

• Value stream mapping may tell you that your
  procurement processes for example, consume
  financial and human resources and extend
  throughout time without adding to the economic
  value of your product or service.
• By identifying non-value adding activities and
  focusing on those processes likely to benefit
  from lean principles, you can begin to eliminate
  waste.

10
Implementing Lean Principles in Supply Chain
Operations (Cont)

• Using the procurement example, the process might
  be redesigned to
• Implement procurement cards to manage routinely
  purchased indirect materials and services,
  completely eliminating requisitioning and
  purchase order activities for this group of
  purchases

11
Implementing Lean Principles in Supply Chain
Operations (Cont)

• Implement pull signals for direct materials
  between buyer and seller. The signal itself
  becomes the requisition and purchase order
• Implement vendor-managed inventories (VMI) for
  both direct and indirect materials, eliminating
  the need for both requisitions and purchase orders

12
Implementing Lean Principles in Supply Chain
Operations (Cont)

• Utilize supplier portals to manage indirect
  spending by working with a supplier to define an
  electronic catalogue of approved products that
  are appropriate to the buyer with pre-negotiated
  pricing, the entire procure-to-pay process can be
  significantly streamlined

13
Collaboration

• Think this part is easy. Think again.
• Internal
• Internal integration is the single biggest
  challenge that companies face.
• Large need for an integrated sales and operations
  planning process to address mismatches between
  supply and demand.

14
Collaboration (Cont)

• Internal
• Must be regular meetings between managers from
  all major functions
• Manufacturing
• Marketing
• Procurement
• Sales
• Fulfillment
• Logistics
• Finance

15
Collaboration (Cont)

• Internal
• An effective sales and operations planning
  process cuts across discrete functions and
  embraces plan creation, collaboration around a
  forecast and management of the follow-up.
• If done correctly, the process should yield
• Lower inventories
• Reduced operating costs
• Better customer service
• Increased profitability

16
Collaboration (Cont)

• External
• Real collaboration means more than an arms-length
  business relationship.
• A workable sales and operations planning process
  will incorporate accurate downstream data about
  the customer, its own consumer and the ultimate
  consumer.

17
Collaboration (Cont)

• External
• Companies must also know the location and
  movement of inventory at points throughout the
  supply chain including customers, distribution
  facilities.
• Companies must also be in constant touch with
  their upstream suppliers in order to understand
  manufacturing constraints and the amount of
  product they can realistically expect to receive.