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- May 12, 2011 -


Supply Chain Graphic of the Week: Supply Management's Role in Innovation


A Framework for Driving Innovation from Supply Management; Most Companies are in the Early Stages, Says CAPS Research


By SCDigest Editorial Staff



It's no secret that more than ever most company CEOs view innovation as essential to top line growth and business success in the current environment, as survey after survey attests.

It's also no secret to many that supply management as a discipline can be a highly effective source of that needed innovation - but how well that knowledge is actually put into practice is, from our view, a whole other question.

A new report from CAPS Research - the research organization affiliated with the Institute for Supply Management at Arizona State University - focuses on the potential for "Innovation Sourcing," and offers some excellent insight into how companies can best leverage procurement/supply management to drive innovation in products and processes.

We are going to publsh a more detailed review of the report soon, but for now will offer the chart below as our Supply Chain Graphic of the Week. Taken from the report, the chart provides a framework for what companies need to consider if they want to maximize the opportunities to drive innovation through supply management operations.

A Framework for Supply Management-Driven Innovation



Source: CAPS Research

The report says that "firms have not yet fully established how they will most effectively leverage external supplier capabilities to accelerate innovation to the benefit of both buyers and suppliers... Innovation sourcing is in the early stages of development at most firms."

We agree - how about you?


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Oct. 3, 2008

There are valid reasons for both the DC and DSD distribution models, but neither should determine the store assortment, which depends on the consumer.

The Distribution Center model makes sense when you have many prepackaged products which are continuously replenished and require little in-store servicing. With the facility justified, you can also add seasonal and holiday 'in and out' products which can share the distribution network.

The key is to manage the time supply of inventory in the warehouse and distribute it efficiently.

The Direct Store Delivery model can be implemented purely as a distribution method or also allow the manufacturer to manage some of the in-store merchandizing.

I do not see any advantage of using DSD simply to deliver merchandise. Although it may help the 'mom and pops' that are on the same route as a large retailer, the DSD model must be more expensive. Once the big drops are removed, it will become more costly to reach the independent retailers but the larger retailer must benefit.

If DSD is used to support in-store merchandising, then you have a different story. The manufacturer's representative can give their products the individual attention that increases their sales. The bad thing is that they can also load up the store with inventory if no one is watching.

Bill Bittner
BWH Consulting


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