Running the supply chain race to the fast lane

One of the keynote speakers at this year's Smart 2005 conference June 1 and 2 at the Sydney Exhibition Centre next month is author Cecilia Cabodi.

She will present findings of a recent study undertaken with Frost & Sullivan, which looked at innovative supply chain strategies and the CEO agenda.

Until now, Cabodi said, companies have been experimenting with collaborative efforts, which focused on aspects such as co-managed inventory, enabling involved parties to improve fill rate, increase inventory turnover, reduce storage and handling costs, and enhance sales.

But globally, it is the electronics, pharmaceuticals, technology and retail industries that are driving innovations, according to Asia Pacific managing partner of supply chain management at Accenture, Jeffrey Russell.

"The rate of supply chain innovation is definitely on the rise here in Australia and New Zealand," he said.

"Organizations across many key industry sectors have understood the power of their supply chains beyond just cost and efficiency concerns, as drivers of increased service delivery, competitive differentiation and increased top-line growth.

"The retail sector, for example, is engaged in a battle of the supply chains with all three major players in Australia undertaking significant programs that will re-draw industry borders and impact the supply chain from manufacturer to store shelf.

"The supply chain has even penetrated into the sphere of advertising, with retailers highlighting their initiatives as factors in delivering better shopping experiences to customers."

Russell said sectors yet to fully tap into the potential of supply chain transformation include utilities as well as financial services and telecomms. "For example, the Australian automotive industry will never have the economies of scale enjoyed by its competition overseas," he said.

"But these players can learn from the electronics industry which has mastered rapid model changes and assemble-to-order."

BlueScope Steel customer service and supply chain management vice president Mark Cowley said in some industries there is still a lack of understanding by senior management of the critical issues.

"As a result, 'improvement to the supply chain' is often an easy, throw-away line which often has little credibility," he said.

The companies that tend to be successful, Cowley said, are those where there is a good understanding of supply chain and application of key principles. He also said that globalization is the main issue that companies need to be addressing when taking a long-term view of their business.

"Companies need to look at how they can link, and optimize the various components of supply, manufacturing, sales and distribution across multiple geographical, cultural and political boundaries," he said.

Strategy replaces technology

Technology advances in supply chain planning and e-procurement reigned supreme during the last wave of supply chain change in the late 1990s. But today's environment is no longer technology driven; it is about fundamental business strategy. And cost and efficiency no longer dominates the agenda.

SMT Consulting director Greg Bywater said poor blueprints were too often only half thought through.

"More time was spent on the technical issues than thinking about the simple supply chain policies that could be incorporated to simplify the final technical requirements," he said.

"Businesses need a methodology for systems' implementations. Businesses need to learn how to use clear policy to manage the supply chain as opposed to abrogating full responsibility to so-called smart technology."

Supply chain management has always been about connecting and integrating various participants in a value chain, according to Justin Grieg, the director of supply chain practice at Capgemini Australia.

"New technology advances, however, are also helping to bring about 'adaptive' supply chains that can quickly respond to environmental change and re-establish equilibrium," he said.

"The arrival of low-cost RFID technology and developments in real-time computing using agent technology are pushing this concept even further. It's highly possible that autonomic supply chains will begin to appear in the not-too-distant future."

Information on tap

More than 60 international and local speakers will be featured at this year's Smart Conference from June 1-2, 2005.

Boasting 10 specialist content streams, more than 1000 delegates are expected to attend the event which will be held at the Sydney Convention and Exhibition Centre, Darling Harbour.

Speakers include the CEO of Telstra ebusiness services David Brawn, Metcash group logistics CEO Ken Bean, Australian Logistics Council executive director Hal Morris and TNT Logistics Australia managing director Howard Critchley.

As well as keynotes identifying global supply chain trends, case studies are featured throughout the program.

Some of the companies presenting case studies include Linfox Australia, Arnott's, Mincom, Siemens, Golden Circle and Clipsal to name just a few.

Topics range from delivering shareholder value through the supply chain to establishing to purchasing and electronic procurement, collaboration, the impact of new technologies and data synchronization as well as distribution networks.

Special workshops restricted to about 30 delegates will also be staged along with education and research forums.

Supported by the Transport & Logistics Centre, the forum explores ways to develop the education sector to generate graduates for the supply chain industry. The full conference program is available at www.smartconference.com.au

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