Supply Market Intelligence:  Think Differently, Gain an Edge

Supply market intelligence (SMI) is a proven approach to reducing risk and gaining a competitive advantage. It begins with the collection and analysis of market data—but doesn’t stop there. The leaders excel at engaging key stakeholders in the SMI process and then disseminating the information in a way that leads to better business decisions. It’s a new way of thinking that can pay big benefits.
image
By Robert Handfield
November 01, 2010 - SCMR Editorial
Download Article PDF

Facing increased uncertainty in economic markets, organizations are increasingly aware of the need to closely monitor market conditions and respond appropriately through improved supply chain strategies.  As more organizations seek to build sourcing strategies that capture cost savings opportunities, they are finding major shortfalls in the market intelligence and cost modeling capabilities that form the basis for effective strategies and negotiation. Further, they are discovering that the needed integration of market intelligence into operational decisions, including budgets, profit objectives, market pricing, technology insights, global expansion is generally not well executed.

The result is misalignment between demand and supply planning, and major gaps in operational performance and risk mitigation.  To address this situation, organizations need to develop deep market intelligence, that will provide insights into core elements of market trends, commodity pricing, global capacity, government and regulatory changes that could impact global sourcing. They also need insight into economic trends that will impact their organization’s supply chain.  Unfortunately, these capabilities seem to be lacking in most organizations, based on the results of a study we recently conducted among supply management executives. Our research is based on interviews with subject matter experts in a number of industries who have deployed or are in the process of deploying centers of excellence for supply market intelligence. In addition, we surveyed 89 global supply chain executives through the International Association of Commercial and Contract Management (IACCM).

This article explores the concept of supply market intelligence (SMI).  We describe how companies are structuring their supply management organizations to optimally collect market data, identify best practices for synthesizing and deploying this information, and establishing metrics for measuring outcomes of SMI.  Further, we discuss how some leaders are now beginning to extend the application of SMI to other strategic business decisions that lie outside the realm of contracting and category analysis—an activity that is positively impacting decisions in annual budgeting, customer markets, technology integration, and financial budgeting.  We believe that the innovative application of SMI to these areas, though still in a nascent stage, will enable many organizations to achieve superior market performance and outcomes.

SUBSCRIBERS: Click here to download PDF of the full article.


About the Author

Robert Handfield

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Lyon, France-based Norbert Dentressangle, a $5.5 billion global third-party logistics (3PL) services provider focused on global logistics, transport, ocean, and air services, said today it has acquired Des Moines, Iowa-based Jacobson Companies, a value-added warehousing (VAW) company, for $750 million from private equity firm Oak Hill Capital Partners.

Download the newly released research report, "Transportation Management Systems" conducted by Peerless Research Group (PRG) on behalf of Supply Chain Management Review and Logistics Management magazines. Learn what logistic experts are saying about their current supply chain technology infrastructures, how they tackle the transportation component, and revealed the gaps that still need to be filled in order to attain end to-end visibility of a streamlined supply chain.

From cost center to growth center. Get insightful opinions on changes in the marketplace from this independent survey of warehouse personnel. Motorola Solutions examined the current warehousing marketplace in our 2013 Warehouse Vision Report, conducted April-May of 2013.

Even though not all publicly-traded less-than-truckload carriers (LTL) have posted second quarter earnings yet, the early consensus for those that have issued results is looking very good.

The advance estimate for second quarter GDP at 4.0 percent could serve as a sign of a steadier and improving economy.

Comments

Post a comment
Commenting is not available in this channel entry.