OIT Times: Supply Chain Management--Cost-saving Success Stories

March 21, 2001

This session provided three real-world perspectives on Supply Chain Management (SCM) in business today. Arthur Rowe of John Deere Company ascribes his company success in reducing supply chain costs to heavy supplier involvement and education. Suppliers are now so active, they often outnumber Deere employees at project sites. Deere educates its suppliers in the latest SCM techniques and sponsors an MBA program with Arizona State University. The company is also currently creating an in-house costing system for its suppliers.

John Oleson of Dow Corning related that chemical companies of all sizes are integrating their supply chains and eliminating unnecessary activities. Initially, this means reducing inventory levels, cutting the number of plants and warehouses, and setting up tier systems for customer care. The industry is now fine-tuning more basic SCM-related operations, such as improving the flexibility of batch processes to speed responsiveness to customer orders.

John Wilson of IBM noted that despite unrealistic early expectations of e-commerce, the technology is steadily changing the economics of goods and services. Speed and visibility of transactions are increasing, and the promise of rictionless commerceis being fulfilled. Pressuring suppliers to reduce price is being replaced by technology-enabled collaborative opportunities. To maximize your e-business, demand open systems, purchase best-in-class software components (vs. an integrated software suite), and view SCM as an ongoing journey.