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The Perfect Storm for Supply Chain Costs

Inflation speculation, a truck driver shortage, and mounting pressure on freight rates could make for quite the oncoming financial storm in supply chains. J. Michael Kilgore writes for CFO that balancing service levels, capital, and operating expenses is the only way to stave off the waves. This is of course much easier said than done, with conflicting intricacies from every angle.

Kilgore comes up with two key actions you need to take. First, aggressively segment customer service levels. This allows you to optimize strategy as it pertains to the full cost-to-serve and customer profitability. Secondly, increase your attention to tactical planning. Use only one sales and operations plan (S&OP), and make it your springboard for deploying “advanced analytics to model specific tradeoff decisions that predict clear business outcomes.” For more, you can read the full article here: http://ww2.cfo.com/supply-chain/2014/09/perfect-storm-supply-chain-costs/

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