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Free Articles From The Current Issue
ASICS keeps pace with growing demandASICS America's single distribution center couldn't keep up with surging demand for its athletic shoes and apparel. Changing its distribution pattern and adding another warehouse helped the company manage both current sales and future growth.
Supply chain versus the volcano
The disruption to air traffic caused by Iceland's Eyjafjallajökull volcano is a reminder of why we should prepare for both expected and unexpected supply chain risks.
Dealing with our oil addiction
Will the Deepwater Horizon disaster spur us to develop new sources of energy?
There's more to performance management than metrics
Getting people to consistently perform at a high level requires more than implementing an incentive program.
Keeping it personal in a digital world
While electronic communication has become a permanent part of our daily lives, face-to-face communication is still important for supply chain success.
Most Read Articles
Who benefits most from optimization tools?
Companies that have invested heavily in their own manufacturing plants to produce large volumes of materials like chemicals, metals, and paper make good candidates for successful use of supply chain-network optimization software. That's the view outlined in the report "Best Practices: Supply Network Optimization in Asset-Oriented Value Chains" issued by the research firm Manufacturing Insights.
The report contends that these types of manufacturers —termed "asset-oriented value chains" —are ripe for optimization because they have made significant capital investments and their high operating costs make asset performance a top priority. In addition, changing demand patterns strain the supply chain because they create regional shifts in distribution and gaps between production and actual demand. Finally, since many of these manufacturers have been involved in mergers, acquisitions, divestitures, and joint ventures, their revamped business structures necessitate a supply chain redesign.
When it comes to using software to optimize supply chain networks, the report says, most manufacturers start out slowly, using fairly simple models before proceeding to more complex ones over time. These types of tools are employed for both strategic long-term planning as well as short-term tactical planning. Supply chain optimization exercises span the gamut, from optimization of inventory and distribution to sourcing and procurement expenditures.
Although the report notes that it's difficult to quantify exactly the return on investment (ROI) or cost savings from network optimization software, manufacturers typically realize savings in the millions of dollars.
We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an e-mail to ?Subject=Letter to the Editor: Quarter 1 2010: Who benefits most from optimization tools?"> . We will publish selected readers' comments in future issues of CSCMP's Supply Chain Quarterly. Correspondence may be edited for clarity or for length.
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