If not effectively managed, in a global economy with distant sources, the customer can find extremely high ownership costs related to low cost high quality components. Finished goods that are depreciating land up in the warehouse as they are not producing revenue. Such finished goods do not add to the value of the supply chain since they lie in the warehouse.
At the same time they are housing sub-assemblies that could be generating revenue. All solutions to resolve this dilemma cut directly into the bottom line. This is where a demand-driven postponement supply chain model can help. This is in lieu of a regular supply chain model where demand alone does not drive it.
The outsourcing of components to more economical global manufacturing sources while concurrently moving final assembly, packaging, testing and configuration down the supply chain - nearer the customers - assists in minimizing instances of demand volatility. A conventional supply chain model fails to push these down the supply chain therefore not assisting in controlling the effects of rapid changes in demand volatility.
Supply-chain postponement boosts profitability by decreased inventory overhead, prevention of reworking of products with low demand and reworking on high demand ones, measurably reducing excess and obsolete inventory, IP (intellectual property) protection, reduced inventory total cost (warehousing, rework, freight, obsolescence, cost of capital, etc.) By considering all these into the account, supply chain postponement reduces the down side effects considerably to add great value to the overall supply chain.
Postponement in supply chain provides a model with among the highest inventory turns in the industry. This is achieved by closing the time gap between supply and demand and not only does it reduce inventory total cost of ownership it also increases the customers ability to flexibly respond to changing market demands. This differs considerably from the conventional supply chain model where the time gap between supply and demand is large due to the distance of the warehoused materials from the location of demand.
Unified bills of materials can be leveraged into multiple new products to service multiple customers. The result is that orders that used to take weeks to fulfill are now shipped in days, if not hours. This innovative concept connects global sources and markets in a way that finally makes sense. Supply chain postponement provides a radical new way of handling supply chains compared to the regular supply chain where the orders can take weeks to fulfill. - 30242
At the same time they are housing sub-assemblies that could be generating revenue. All solutions to resolve this dilemma cut directly into the bottom line. This is where a demand-driven postponement supply chain model can help. This is in lieu of a regular supply chain model where demand alone does not drive it.
The outsourcing of components to more economical global manufacturing sources while concurrently moving final assembly, packaging, testing and configuration down the supply chain - nearer the customers - assists in minimizing instances of demand volatility. A conventional supply chain model fails to push these down the supply chain therefore not assisting in controlling the effects of rapid changes in demand volatility.
Supply-chain postponement boosts profitability by decreased inventory overhead, prevention of reworking of products with low demand and reworking on high demand ones, measurably reducing excess and obsolete inventory, IP (intellectual property) protection, reduced inventory total cost (warehousing, rework, freight, obsolescence, cost of capital, etc.) By considering all these into the account, supply chain postponement reduces the down side effects considerably to add great value to the overall supply chain.
Postponement in supply chain provides a model with among the highest inventory turns in the industry. This is achieved by closing the time gap between supply and demand and not only does it reduce inventory total cost of ownership it also increases the customers ability to flexibly respond to changing market demands. This differs considerably from the conventional supply chain model where the time gap between supply and demand is large due to the distance of the warehoused materials from the location of demand.
Unified bills of materials can be leveraged into multiple new products to service multiple customers. The result is that orders that used to take weeks to fulfill are now shipped in days, if not hours. This innovative concept connects global sources and markets in a way that finally makes sense. Supply chain postponement provides a radical new way of handling supply chains compared to the regular supply chain where the orders can take weeks to fulfill. - 30242
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Postponement in supply chain process needs intelligent systems to be implemented in the organization. So, ensure to use the best solutions for supply chain postponement for your organization.
