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

Having introduced into the California State Senate a new bill designed to give an exemption from sales and use tax for port terminal operators purchasing zero or “near zero-emission” equipment, Lara is trying to advance two agendas.

The notions of “green shoots” or “cautious optimism” in gauging the current state of the economy does not specifically exhibit what is really happening, when assessing how things are actually going, it seems. That was made clear by Bob Costello, chief economist at the American Trucking Associations, at last week’s NASSTRAC (National Shippers Strategic Transportation Council) Shippers Conference and Transportation Expo in Orlando, Fla. last week.

With a 6.8 cent gain to $2.266 per gallon, this week’s average diesel price is at its highest level since the week of December 28, when it was at $2.237 per gallon.

Manufacturing activity in April remained on the right side of growth for the second straight month, following six months of contraction, according to the April edition of the Manufacturing Report on Business from the Institute for Supply Management (ISM).

Some 22 centuries after the original Silk Road smoothed the path of Chinese silk merchants to Europe, a new effort is beginning to build a new 21st century highway between Europe and the burgeoning economy of China, now the world’s fastest-growing market.

Comments

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