Top Ten Supply Chain Challenges

IT’s NOT TOO LATE to carry out your New Year’s resolution to fix your supply chain in 2004. Even if you’ve been, ahem, rather slow to get going, you can catch up quickly if you “take action on a couple of high-priority items,” advises Scott Elliff, president of Capital Consulting & Management, a supply chain consulting firm based in Alexandria, VA.

At first glance, Elliff’s ten-point “Supply Chain Executive Agenda” for 2004 seems forbidding. It recommends that companies develop meaningful collaboration programs; accelerate decisions and actions; optimize cash flow; gather data on supplier spending; tighten supply chain security; align performance measures and incentives; redouble efforts to use existing software; monitor the performance of third-party service providers; deploy advanced analytical tools; and evaluate the role of RFID and related technologies. That’s a lot to accomplish in a year, but you don’t have to do it all, or even in a specific order, Elliff says. “Assess where you really are — it’s not necessary to start with No. 1.”

He notes, however, that the first three items on the list “have a pretty fast payback and probably a relatively low investment,” making them good places to begin. For instance, supply chain collaboration programs often fail because companies fear sharing information with vendors, Elliff says. “The mindset toward the supplier is, ‘You do what we tell you and we’ll write you a check.’”

Elliff strongly endorses speeding up supply chain activities, especially such time-wasters as using expedited delivery services to transport products that then sit around for days on the customer’s receiving dock. “The key thing is to take out the wait times so that the full response times can be shortened.”

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