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CONTRACT MANUFACTURING: THE VALUE OF A NETWORK BASED APPROACH | 2024
Network Automation. Why Does It Matter?
This may lead you to ask, if the value is so compelling, why is only 8% of synchronized communication between trading partners moving through a Supply Chain Network Operating system? The synchronization of multiple flows with a system of
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QR Code Visibility of Sourcing for the Buyer. Customers of brand owners want to know the origin and processing of materials. Network enablement is required to show where and under what conditions
record will not come from ERP providers, supply portals, EDI exchange methods, or collaborative business data exchanges.
the product was manufactured to accomplish the goal of a QR scan at the shelf. Prevention of Counterfeit Goods. Network enablement and authoritative identifiers help to prevent counterfeit goods. Lineage and track and trace are the cornerstones of the safe and secure supply chain. Improving Time-to-Market for New Products. Improving data flow to contract manufacturers improves
______________________________ Bullwhip Effect The signal distortion of channel requirements as an order moves upstream from the selling channel, through manufacturing to a supply node. In each stage, the requirements increase in amplitude and variability
The answer is focus. Companies are busy with enterprise initiatives. IT organizations consumed with upgrades of existing software have very little time for the topic of building a Supply Chain Operating Network to automate the flows between contract manufacturing and brand owners, so why should you care? Many lack the understanding of the value proposition. For all, it requires rethinking the paradigms, as shown in Figure 5. The reason is more evident when you consider the value propositions stemming from Figure 5: • Multi-tier Order Promising. Improving Order
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See Appendix for Bullwhip Calculation ______________________________
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cycles to get products to market.
• Minimizing the Waste from the Bullwhip Effect. In this report, we will share data on how a supply chain operating network improves data latency and reduces the number and severity of black holes. This reduction
Reliability of Shipments. Knowing multi-tier inventory availability improves order promising by better transportation routing/load management. Sensing market shifts quicker and translating the requirements with shorter cycles improves on-time and in-full deliveries, powering growth agendas while reducing the fines/penalties.
in cycle times, with better data accuracy, reduces the supply cycle and the bullwhip impact. This is especially important in delivering Corporate Social Responsibility (CSR) program commitments. Let’s consider the brand owner and contract manufacturing perspectives to better understand the value.
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