29 Apr 2021

From the Bottom to the Top How the Supply Chain Impacts Value Streams


By utilizing supply chain software, companies can impact their value streams to unlock greater value from bottom to top.
Value streams are the actions undertaken within a manufacturing or service company that drives customers to realize the worth of the product or service. But today, as digitization unlocks more value across an enterprise, supply chains are becoming more intrinsically linked with value chain mapping and planning to optimize that value.
Traditionally, supply chains were thought of as a loose, disparate collection of suppliers. Siloed departments within a company would handle scheduling and purchasing, while forecasting was a combination of sales input and historical data analysis, often done manually. But the power of digital transformation tools combined with unprecedented disruptions means that companies are now beginning to tie supply chains to their value mapping. This process enhances the performance of the value stream and delivers greater value to internal and external stakeholders.


Converging Interests

The reason for this convergence is two-fold. First, as COVID-19 created unprecedented disruptions across the globe, inventory and supply professionals were sent scrambling to respond with more accurate models and more agile responses.
Furthermore, despite disruptions, technology and advances in software have created new and precise digital tools allowing professionals to utilize advanced algorithms and analytics in platforms to benefit the value stream. Inventory forecasting and optimization are now a vital part of many value streams because the accuracy of data-driven forecasts can impact the way value streams are structured to enable or extend lean and just-in-time methodology throughout an operation.


How the Supply Chain Impacts Value Streams

Here are a few of the ways software-driven supply chain management can impact value streams with accurate inventory optimization:

  1. Enables End-to-End Visibility: Using inventory planning and optimization software increases end-to-end visibility within the supply chain. Supply chain departments are no longer siloed and rely on data-driven insights from advanced algorithms and analytics. This removes barriers among suppliers and allows decision-makers to create a systemized inventory strategy with a combination of long-term partnerships. By using a systems perspective, the value stream receives what it needs for production.
  2. Enables Strategic Thinking: With supply chain software, professionals can look at the supply chain overlayed with the value stream map to compare system differences and advantages. By identifying areas within the supply chain where supplier economies of scale or more productive partnerships can improve cost and reduce lead time, a global inventory strategy can be defined.
  3. Ties Pieces Together: With companies sourcing from suppliers worldwide, manual tracking of material and components is inefficient. By utilizing inventory planning and optimization software, companies can lower production costs, as well as warehousing and holding costs. They can also provide insights to help make decisions on nearshoring and reshoring based on time reduction and more favorable distribution arrangements.
  4. Uses Automation to Link to Value Streams: Software allows purchasing, forecasting, and many transactional tasks to be automated. This way, planners have access to near real-time data and the value of the analysis and insights this data provides. This means that inventory can be forecast using statistical methods rather than a combination of manual–and often inaccurate–spreadsheets. It also allows confidence in both order point and safety stock without creating excess inventory.

Inventory Planning and Optimization software from Plex DemandCaster allows planners to control inventory so they can navigate the toughest disruptions. However, with a systems approach, plus analysis and insights unlocked by data, this software also improves stakeholder value, becoming an essential part of the value stream and not just a loose collection of siloed and disparate departments.
To maximize the impact of the supply chain on a company’s value stream, contact Plex DemandCaster today.






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News & Trends

Last update 12 Nov 2021
Output growth hampered further by material shortages, but expansion in new orders remains sharp
   Source: Markit US Manufacturing PMI   -  IHS Markit
United States 


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