Supply Chain Fundamental Rethinking

In the world of business; we know that it is the series of links from the supplier to the customer which have to be synced to make you viable in the future. The performance of these links determine the overall performance of the Supply Chain in turn the Organi z ational Performance. Supply Chains undertake improvement i nitiatives by adopting the B est P ractices & T ools coupled with their T echniques ranging from Lean to BPR to incremental performance improvement initiatives. These initiatives are typically led & driven by the OEM or the Manuf acturing link of the Supply Chain .  While I work & observe such initiatives , i find them to be really energe tic, in certain cases led by a business case of the Supply Chain function indicating the improvement impact of the initiative on the Organi z ation & a lot of th at. Many a times the re sult of these improvement initiatives is reduction in inventory, improved quality, higher OTD from the Suppl ier ...

In the world of business today, Cash, more than anytime else in the history, is the King. The state of flux of demand, the uncertainty of economy & it's performance, increased stress on asset utilization & risks associated with global trade have resulted in an increased stress on the Supply Chain. It looks logical that the largest cost contributor to the organizational costs will have to lead the initiative to preserve 'Cash'. The improved Cash flow i.e. Working Capital Cycle naturally improves the position of your company where now you need to borrow less money, return some cash to shareholders etc. The Cash Flow Cycle of a business is pretty straight forward - you have accounts receivables (money that is to come into the business), accounts payable (money that you owe) & Inventory (money locked in the system). It is fairly obvious that the Cash is easy to be released into the business if the company works on reducing the days receivables outstanding ...