Last week I had the good fortune of attending a seminar by John Benito on the subject of The Future of Supply Chain Management — Adapting technology to improve business efficiency and performance.

I took notes about John’s most interesting insights.

The costs behind complexity

Complex systems like SAP involve many costs (a few 25k/month employees, 150k/user licenses…).

Customization is very time consuming and required experts. Many companies will look for simple systems that provide “just what is needed” for their operations.

Solutions to reduce the value of inventory

• VMI (Vendor Managed Inventory) projects: having the supplier deliver with lower lead times or even deliver components in the buyer’s warehouse (customer only pays for parts when they are used).
• “Make to order”, not “make to stock”.
• Integration of IT systems with suppliers, so that suppliers can deliver just in time.

Making a blue print about the supply chain

Many companies need different streams for “make to stock”, for “make to order”, for “internet sales” etc. in their organization. Systems and processes need to be adapted accordingly.

Using consultants

• There is no such things as “best practices” that apply to every company.
• People working in the company are in the best position to know what is needed. Good consultants ask the right questions and show relevant examples, and the organization itself gets to the right conclusions.

Be careful when collaborating with other parties

Sometimes constraints are not forecast properly. For example, Maersk’s newest boats can carry up to 18,000 containers, but ports in the US have cranes that can’t accommodate these ships when they are full. So the ships only carry 15,000 containers and prices had to go up.