Applications & Services: 21st Century Logistics Forecasting remains relevant in the ongoing document management revolution

March 6, 2006 - Manufacturing Business Technology Magazine

By: Nancy Bartels, senior editor

With supply chains extending due to globalization, Razat Gaurav, VP of global transportation and distribution for supply chain management solutions vendor i2 Technologies, sees businesses facing two main challenges: managing costs, and securing reliable service.

"Total cost of logistics as a percent of cost of goods sold is going up because of longer distances involved, higher fuel prices, and capacity issues," says Gaurav. "Companies have to manage these costs while still trying to reduce total landed costs. Global sourcing also means more variability in lead times. The scope and opportunity for things to go wrong is high. Reducing variability and getting more reliable service is essential."

Left to its own devices, a supply chain can be brittle, uncertain in its performance, and costly. Enterprise business applications support supply chain management by automating transactions and delivering transparency, thereby lowering costs and increasing flexibility.

Recent discussions with users and providers of supply chain solutions-as well as with market followers-touch upon these areas:

• Using inventory forecast accuracy to balance for longer lead times;

• Coordinating the physical and financial supply chains; and

• Achieving effective, secure movement across borders through trade document management.*

Manufacturers send products to Fidelitone Logistics-a Wauconda, Ill.-based supply chain services provider-for labeling, kitting, and delivery to customers. "We've been importing from the Far East since the late 1970s," says President Josh Johnson. "Technology has become so vital now. You can talk about just-in-time inventory all you want, but forecasting today is more crucial. We spend a lot of time predicting inventory requirements."