Improve Information Accuracy in Supply Chain Management

Accuracy in Supply Chain

Supply Chain Management is complex thing to deal with. There are so many processes and ways to deal with Supply Chain. There are issues as well as ways to deal with supply chain with the help of information technology.

Major aspect of supply chain management is to maintain the accuracy otherwise there may come bullwhip effect and other issues as well.  Many managers or the organizations can achieve coordination by improving the accuracy of information that is available in different stages in supply chain.

Improve Information Accuracy in Supply Chain

Sharing POS Data

Retailers sharing POS data with other supply chain stages, all Supply Chain stages can forecast future demand, based on customer demand. Sharing POS data helps reduce the bullwhip effect because all stages respond to the same change in the customer demand.  

Implementing Collaborative Forecast and Planning

Once POS data are shared, different stages of the supply chain must forecast and plan jointly if complete coordination is to be achieved. Without collaborative planning, POS data does not guarantee coordination. The key is to ensure that the entire supply chain is operating to a common forecast.

Designing Single State Control of Replenishment

When a single stage controls replenishment decisions for the entire chain, the problem of multiple forecasting is eliminated and coordination within the supply chain follows. Retailer acts as single state of control

In CFP-Continuous Replenishment Program, Wholesalers or manufacturing replenishes a retailer regularly based on POS data. The CRP could be suppliers, distributor or third-party managed. The CRP systems are driven by actual withdrawal of inventory from retailer warehouses rather than POS data at the retailer level.

ERP (Enterprise Resource Planning) systems that are linked across the supply chain provide a good information infrastructure on which a continuous replenishment program may be used.

In VMI (Vendor Management Inventories), the distributor or manufacturer monitors and manages inventories at the wholesaler or retailer. This centralizes the replenishment decisions for all retailers at the upstream distributor or manufacturer. Ex- K-Mart and Fred Meyer has successfully implemented the VMI.