An organisation's supply chain is perhaps it's greatest secret weapon when seeking to enhance customer satisfaction and improve profitability. Customers growing expectations and changing shopping behaviours are the main force behind a demand-driven supply chain. There is mounting pressure from an increasingly impatient customer base demanding products faster and cheaper, while at the same time expecting a decrease in lead times throughout the value chain.
“Supply risk is defined as the probability of an incident associated with inbound supply from individual supplier failures or the supply market occurring, in which its outcomes result in the inability of the purchasing firm to meet customer demand or cause threats to customer life and safety”.
Supplier Relationship Management (SRM) is a term that has moved out of the realms of procurement and has taken its place firmly within the supply chain lexicon. The concept of SRM evolved in the eighties as a term referring to a more proactive relationship between organisational buyers and suppliers where buyers understand and document the risks and impact of each supplier in terms of profit and business continuity.
A transport network is the lifeblood of any supply chain. Without an adequate transport network, the entire system will malfunction, failing to deliver freight when and where needed. This seems relatively obvious, and indeed simple, but often such networks are products of history. Over time, organisations grow and evolve. Products lines are introduced or discontinued, markets are entered or exited, and demand is fluid. Organisations that have grown from humble beginnings to large complex operations can have deeply ingrained processes, some of which may well be defunct in the environment in which the organisation operates.
Supply Chain and Logistics terminology can seemingly not keep up with the rapid evolution of the industry. For years we have become accustomed to organisations adopting 3-or-4PL business models, but of late abbreviations such as 5, 6 and even 7PL beginning to become part of the logistics lexicon, but what exactly to do these terms mean?