The ABC of Supply Chain Analytics
With major pharmaceutical manufacturers across the globe trying to cut costs, the supply chain comes under increasing scrutiny as an area which can be streamlined even further – both in terms of efficiency and cost.
Couple with this the rapid expansion into new and emerging markets, and it has become more important than ever to ensure the supply chain runs at maximum efficiency.
Supply chain analytics is decsribed as when a company scrutinises their whole supply chain process and assess which areas need to be improved and made more efficient. The supply chain itself is quite a complex affair. Management are dealing with several suppliers and working on a global basis, making supply chain analytics quite hard to do.
Questions need to be asked in order to analyse the supply chain correctly:
- A: Examine which suppliers are the best and most efficient: some suppliers are better than others. The more efficient the suppliers are the better the supply chain will work.
- B: Impaction of different factors can affect the supply chain. The impact of various elements like weather or the rise and fall of fuel prices on the delivery system will affect cost of supply.
- C: How much inventory to keep for certain products. This is to do with accurate analysis of supply and demand. Over stocking can cause wastage and force companies to lower prices to get rid of old stock, in order to prevent heavy losses. Under stocking can incur losses as the company will need to back order and sometimes need to compensate the customer for waiting. Worse scenario is when customers go to competitors to get their order done on time, rather than wait for the back order.
Once supply chain analytics have been conducted a pharmaceutical company can then apply the necessary changes needed to increase efficiency and cut costs in the supply chain.
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