Page 10 - Logistics News - June/July 2021

O P I N ION

ends – procurement to supplier and selling to customer. spend with. Identify the percentage of spend they
Sure, rely on a forecast, but what if your customer’s forecast command – check supplier group companies and your
missed real market signals? Work together creating the group structure. Spend can be a broad network of group
most accurate forecast you can – link up end consumer companies selling to yours. Rank them, contract them,
demand, don’t just repeat last year’s sales with 5 percent on price and deliver better with them.
top. • Sourcing uses request for quotation (RFQ) to keep
suppliers alert. Do your suppliers do quality checking
Service levels require best information, best forecasts. rather than you? Try trust, but support with stats.
Uncertainty in supply and demand means more stock is Sourcing is about selecting, negotiation price and
kept buffering this, so reduce uncertainty. Share plans with conditions.
key customers – give them access to your system to see • Operational procurement is about plans, order quantities,
what stock you have and when you plan replenishment. meeting pack sizes (less damage), collaborating on
Make customers stock products specific to them; you keep changes to plan and near-horizon deliveries so both are
buffers of products you sell to many customers – help effective, avoiding waste. Think catalogues and shopping
optimise the supply chain stock mix and location. Optimise cart IT here.
inventory.
Manufacturing
Beware the last guy in the chain doesn’t price up to Industry 4.0 – utilise advanced technology to increase
forsake all your cost savings – markets lead consumer operational efficiency/visibility and shorten production
pricing, not naive suppliers. lead times while reducing costs and delivering greatly
improved customer service. But COVID-19 pushed leading
Procurement companies from the Industry 4.0 Train to the 5.0 Express,
Procurement IT advances include collaborative planning where man and machine are connected – collaboration
like the customer end. To win your race here, you should be between real people and smart machines
looking at some of the following:
• Differentiate between strategic sourcing and operation IoT, in the front carriage, gathers real-time data from a
procurement. range of devices across supply chains, covering production
• Strategic sourcing involves analysing where/who you counts, quality, safety, product and process innovation and
more.

ERP has become a must for manufacturers – the basis
on which to streamline processes through automation and
provide accurate real-time information, reducing costs.
But now, ERP is enhanced with agile applications like
manufacturing operations management (MOM), predictive
maintenance/scheduling, e-commerce apps... rather than
trying to make ERP do it all.

5.0 spikes interest in human-centred AI, which will
grow as remote work continues and social distancing
remains. Artificial intelligence will be the standard for
L O GI S T I CS NEWS don’t consider how humans interact with and leverage
addressing these challenges, but it will fail if companies

these new technologies.

So, are you running a marathon or a company sports

8 JUNE/JULY 2021 day? • www .l o g ist i csn e w s .c o .z a