SUPPLY CHAIN OPTIMIZATION

Supply-chain optimization is the application of processes and tools to ensure the optimal operation of a manufacturing and distribution supply chain.

The classic supply-chain approach has been to try to forecast future inventory demand as accurately as possible, by applying statistical trending and “best fit” techniques based on historic demand and predicted future events. The advantage of this approach is that it can be applied to data aggregated at a fairly high level (e.g. category of merchandise, weekly, by group of customers), requiring modest database sizes and small amounts of manipulation.

Having a supply chain that can equally and effectively handle every single process would be a dream, but let’s face it, you are going to have some underperforming aspects. Many companies falsely believe that because their supply chain can handle everything in the short term that it is still the best and most efficient choice. This is not the case. Outsourcing certain tasks can often have larger long-term rewards than handling everything in-house.