SOURCE: Infor Global Solutions

Infor Global Solutions

March 29, 2011 14:42 ET

How to Mitigate Global Supply Chain Risk

Infor Supply Chain Expert Available to Address How Technology Can Help Build Global Supply Chain Resilience

ATLANTA, GA--(Marketwire - March 29, 2011) -

SITUATION: Events in Japan -- as well as world macro-economic events such as commodity price fluctuations -- have brought into sharper focus the topic of supply chain risk and the need to build resilience into global supply chains.

"Supply chain directors must face the question of whether or not there is anything that can be done to mitigate risk brought on by these unplanned events," said Mark Humphlett, director of ERP product marketing at Infor. "They must look at what business processes and technologies need to be put in place to best equip their organizations to mitigate risk."

SOLUTION: Savvy organizations will embrace the principle of supply chain agility and build resilience into their supply chains. Mark Humphlett offers three business processes and technologies that offer up some protection against supply chain risk.

First, he advocates -- design your network right in the first place. How do you do this? Tools such as Infor SCM Network Design or Advanced Planner allow companies to determine where and when to make, buy, store and move products through their network, and evaluate different production, transportation and inventory strategies to keep pace with changes in the business environment. Companies can therefore utilize their assets most effectively, reduce costs, lower inventory levels, enhance customer service and even decrease carbon emissions.

Secondly, Mark suggests using advanced supply chain tools to perform a complete risk assessment by building different scenarios and modeling them extensively. For example, examine how your network might cope with a complete outage of supply or distribution capacity, i.e. a 12 week outage in Japan. Ask yourself questions like: Can you source products from different regions? At what cost? At what impact on sales? How would profits cope with a 20 percent increase in distribution costs due to an oil price hike? Would it change your sourcing strategies? These and other real-life scenarios can be tested with advanced supply chain planning.

Finally, Humphlett asserts that companies need a solid, institutionalized business process that actively considers these risks and assesses their impact. "A strong Sales and Operations Planning process is often a good forum for flushing these issues out," offers Humphlett. "This strategic business planning process has evolved over the past decade to something more than just demand-supply balancing. It now considers alternative demand-supply scenarios as well as their impact on revenues and margins."

Infor Sales & Operations Planning (S&OP) is an ideal solution to support the process with the right technology components to serve as an effective part of the supply chain risk mitigation. By analyzing critical business data, planning for what-if scenarios, and putting automated processes in place, companies can manage variability in demand that may adversely affect their supply chain so they can react quickly in crisis situations.

EXPERT SOURCE: Mark Humphlett has been at the forefront of the supply chain industry for years and currently oversees Infor's ERP product marketing.

CONTACT: If you would like to speak with Mark Humphlett to further examine some of the key sources of global supply chain risk and practical steps organizations can take to mitigate it, please contact Christina Talarico at 312-240-3386 or Christina.Talarico@edelman.com.