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

83% of surveyed manufacturers either already have IoT implementations in place or plans to deploy within a year.

While the Port of Oakland agrees that Saturday gate operations might ease congestion, they have a few "concerns" of their own

The four international marine container terminals at the Port of Oakland have announced they are developing a program to operate their terminal gates on Saturdays to reduce weekday congestion at the port.

Private fleet managers are facing a remarkable set of challenges in today's demanding business environment. The "from any place at any time" omni-channel fulfillment mindset is just one significant development that companies have had to adapt to in their quest to keep customers and business partners happy.

This is the first guaranteed weekly service direct to the U.S. from Singapore as part of the company’s initiative to enhance its LCL offerings serving Trans-pacific needs.

Comments

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