SUPPLY CHAIN IS ABOUT MORE THAN REDUCING COSTS

To begin, then, the process of tracing value to the P&L and financial statements,
we must accept the premise that there is more to a supply chain effort than simply
cutting costs in perpetuity. That sort of intention will get the effort launched and
provide the early savings to fund a continued effort, but it cannot be the long-term
element of sustenance. At its core, ASCM is concerned with improving business
processes, and thereby enhancing a variety of important metrics, including those
affecting costs, revenues, asset utilization, customer satisfaction, and return to
stakeholders.

Using SCOR� as a guide, we see the linked supply chain processes, laid over
the overall enterprise processes with a few carefully selected additions. Beginning
with the source or buy process step, the challenge begins with a need to
move beyond just finding the lowest priced suppliers, to work with key suppliers
to help with the design and development of new products and services.
The intention becomes to create and deliver a flow of innovative products and
services in the shortest possible cycle time, from concept to commercial success,
while improving the percentage of successful efforts. The next need is to
link the development processes in a way that features of customization can be
added for the highest priority customers and consumers.
Underpinning the third important process step is the need to have a communication
system at work that reliably informs the constituent members of the
supply chain network of exactly what is happening within the overall system.
That means there is visibility into the linked partners� operations and access to
their databases in a way that vital knowledge can be easily extracted, without
risk to security. This information becomes a key element in effective forecasting
and planning, so that schedules going to the manufacturing process are truly
linked with actual demand.