What do you think of when someone mentions supply chain? Most commonly it’s factories, sourcing and shipping. When people used to talk about supply chain, they would refer to how manufacturers got goods from suppliers to deliver products to customers.

Now, people think of the supply chain involving all steps businesses take to get goods or services from suppliers to deliver goods or services to customers. Not just the farm-to-fork process, but all steps needed to bring a dish to the table.

Traditionally, purchasing of goods has been managed closely, but there is greater opportunity for cost savings for services than for purchase of materials.  The restaurant industry has opportunities for savings by using supply chain principles to focus both on the costs of services as well as putting focus on increasing accuracy and efficiency in the procure-to-pay process.

As exciting new technologies become available with the potential to streamline supply chain processes and introduce new efficiencies, industry decisionmakers are eagerly integrating these tools into their existing processes. These tools can make a meaningful impact.

But decision makers must be familiar with the costs, considerations and consequences of implementation. Utilizing and optimizing transportation management technology begins with understanding the best practices associated with successfully making that technology part of an efficient platform.

The trends in logistics are changing. Fulfillment centers around the globe are adapting to better suit customer demands. We’re seeing more automation and robotics, more office improvements, more levels of complexity, more security and more employee workplace amenities among others.  In short, businesses are expecting more. And they want more now.

Leasing new property is an important part of expanding or streamlining operations. Whether it’s done to expand into a new market or make business easier for staff members or external customers, leasing decisions have always been an important logistics challenge. But while a landlord’s main customer is the tenant, the capital structure of distribution buildings is critically important.

The word “factory” conjures up a set of particular images – typically of a dedicated facility or a group of buildings with a slightly rundown exterior, located on the outskirts of a town or a city, with a shop floor that’s noisy, none too clean or well lit, and full of heavy machinery and endless conveyor belts where workers are engaged in repetitive manual tasks.

But factories focused on enabling mass production are fading into obscurity as manufacturers look for more use of current and emerging technologies to facilitate mass customization. Instead, we’ll see a variety of factories emerge in a range of locations, which may be fully automated or employ a mix of robots and human staff.

Between rising competition and the tightening of budgets, today’s supply chain and procurement managers face more challenges than ever, especially when it comes to visibility. In fact, a recent Transport Intelligence survey indicated that lack of supply chain visibility was the number one challenge for logistics stakeholders in the past year, with only 16.9 percent of respondents reporting that they have end-to-end visibility into their supply chain, including insight into partners.

One of the top ways logistics leaders can alleviate some of these pain points is to focus on proper execution of supply chain activities – from global trade and the movement of goods to storage – through the use of information and data to provide visibility and collaboration. This process is referred to as supply chain execution convergence (SCEC). 

CEOs and boards are pushing senior managers throughout their businesses to embrace big data. Case studies carrying huge ROI numbers circulate quickly and broadly, spurring the expectation to follow, or even lead, innovations in data-driven processes.

Companies have already invested trillions of dollars in data and databases. Today, there are certainly opportunities to bring that data to bear in reducing cost and improving performance, but most of those strategies take time and substantial effort. With leadership looking for results now, the race is on to deliver a win for big data and buy time for other strategies to develop.

Good news for supply chain executives: the best answer may be procurement optimization. By investing strategically in big data analytics, procurement executives can find significant value in optimizing smaller, under-the-radar vendors.  By simply organizing and analyzing data that up to now was not worth the effort, companies could find up to four times the savings they get out of procurement optimization for their biggest suppliers. 

Supply chains – often involving many vendors and complex relationships – have always been a logistical challenge. As business evolves in our modern, mobile world, and enterprises are doing more global transactions than ever before, it is also becoming a collaboration, communication and accountability challenge.

While the process of managing a supply chain is getting more complex, the environmental consequences, labor considerations and sustainability of supply chains is also under extreme scrutiny. These challenges can all be rolled into the concept of supplier responsibility; how responsible is an enterprise when choosing suppliers and how socially responsible are those suppliers when creating their products or services?

Building on this trend, an increase in the prevalence of flexible, center-led models indicates that top leadership in procurement is now occupied with more strategic roles. Forty-nine percent of procurement executives report that their departments are organized around a Center Of Excellence (COE), reflecting a longstanding trend of consolidation of oversight and jurisdiction within companies. 

What is interesting to note is that the newer, center-led model is behind by a margin of only ten percentage points, accounting for 39 percent of the response. Put in perspective, a decentralized procurement model was in use within only 12 percent of represented organizations. 

What becomes clear from these numbers is that procurement’s increasing responsibilities can no longer be met within a decentralized environment. The consolidation of control within businesses is now being reflected in the structure of procurement departments themselves. 

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