Levely made his remarks during his presentation, ‘Business Model Innovation Spurs Supply Chain Improvement,’ at the Supply Chain Planning & Forecasting: Best Practices Conference With Advanced Practices in S&OP Forum, hosted by the Institute of Business Forecasting & Planning.
“Without proper execution, the efficiencies and cost savings you’re striving for will never be realised,” said Levely. “Formally instituting standard processes – and maintaining these processes – as part of your day-to-day operations is critical in order to make dramatic efficiency gains.”
This is especially important for multinational companies that have to deal with rising freight costs, excessive inventories and warehouse inefficiencies, Levely said. Customising orders and shipping requests add huge costs to the order and delivery process. If companies can find a way to standardise these services, they will recognise savings that directly impact the bottom line.
Levely used his own company brand as an example of how companies need to execute their supply chain strategies to gain an edge in today’s fast-paced business environment. The XIAMETER web-enabled business model has been an example of supply chain innovation since it was launched by Dow Corning in 2002.
“A major contributor to the XIAMETER business model’s cost efficiency has been automation,” Levely said. “And SAP has provided the backbone for this efficiency.”
When a customer places an order online, SAP recommends first available ship dates. When the order is confirmed, the material is scheduled to be produced and shipped just in time without human intervention. Customers receive automated order confirmations, shipping notices, and electronic invoices. This automation allows for reduction in manpower and inventory, ultimately adding to the bottom line.
“An additional element resulting in cost efficiencies has been our business rules,” Levely said. “In order to standardise, you have to set and live by business rules that apply to a broad set of customers. That means you provide options, but you must also limit those options.”www.xiameter.com