Ever notice how the pendulum seems to always be in motion, and always drawn back to center? The arc pursued the last several years has been to harness ERP system technology so that actual demand pulls product into the distribution network. In such environments, replenishment is not triggered only by a forecast or pre-determined minimum stock requirement, but by deep visibility into customers’ actual plans. This has enabled wholesale distributors to lower inventory levels and simultaneously narrow losses tied to out-of-stock situations or obsolete goods. Real-time collaboration with customers, suppliers and trading partners allows all parties to pursue their enlightened self-interests and, in the process, eliminate expensive rush orders, out-of-stock delays and disrupted processes.  Demand-driven wholesale distribution takes the enterprise down the Lean road, with all the attendant efficiencies, financial rewards and competitive advantage.

ERP Software

Wholesale Distributors Embrace Adaptive Supply Chain Networks (Part 2)

Adaptive supply chain management (ASCM) represents a centering of the pendulum, if you will, tempering pull methodology with a strong dose of forecast-based push planning. While pull still takes the lead, improved global visibility enables managers to supplement push methodologies to best meet supply chain planning and execution requirements. Informed by the insight of push collaboration, forecast planning actually is smarter, more responsive and tighter in the turns. It is not a return to old push models so much as a whole new approach to push that is only possible with a strong pull model operating at the same time.

Supply chain managers have real time visibility of goods in a cascade of systems up and down the supply chain with adaptive network tools. They can tap into inventory from a variety of sources other than just their own warehouses to track products and respond to customers’ fulfillment needs and react to sudden changes in supply or demand anywhere in the system.

Adaptive fulfillment networks are ultimately dependent on the ability of warehouse personnel to actively manage activities such as inbound and outbound processing, facility management and storage strategies, physical inventory and both planned and opportunistic movement of goods. This requires a robust, state-of-the-art warehouse management system and advanced data collection technology such as RFID and mobile devices with voice recognition to make processes more efficient. Incoming goods, for example, need to show up in inventory and be available to fulfill customer orders as soon as the delivery truck enters the yard. As goods are picked from inventory, they vanish from warehouse inventory instantly.

ERP systems have always been about finding a million ways to nudge the efficiency agenda ever closer to perfection. Ideally, for wholesale distributors, their warehouses would be empty, every shelf bare. Delivery trucks would back up to shipment trucks in the ultimate cross-docking maneuver. Incoming goods would be sorted, repackaged and shipped to customers minutes after arriving. By tying customer’s forecasts directly to supplier’s production schedules, only products already spoken for would ever be procured in the first place. Why should it be any other way? In is pursuit of that perfection that Adaptive Supply Chain Networks are elbowing their ways in distributors’ consciences.

In Part 3 we’ll look at how warehouse inbound processing can support adaptive supply chain networks.

Written by :

pamelarichards