Supply chain projects can help companies reduce cycle time, increase their flexibility and eliminate the need to stockpile inventory. They can also cut costs by eliminating obsolete business processes, reducing mistakes and decreasing the number of hands that touch goods on their way to the end customer. This overview of the current state of supply chain optimization practices spotlights companies at different stages of the undertaking. Many people view supply chain optimization primarily as an exercise in inventory reduction. But the ultimate goal is to garner higher profit margins on finished goods.
People focus on inventory first.
The theory is that customers will pay top dollar for products that exactly match their needs and desires. Today's supply chain optimization stars often come from the retail industry. Wal-Mart famously led the way a decade ago, leveraging its colossal buying power to make suppliers play a greater role in managing inventory. Increased efficiencies allowed Wal-Mart to slash costs to consumers. High-tech manufacturers such as Sony Electronics have also been early adopters of supply chain technology, which has helped them fight constant price erosion.