JDA Offers Risk Mitigation Strategies for Supply Chains From 200 to 10,000 Miles
April 12 2011 - 8:00AM
Business Wire
The recent natural and nuclear disasters in Japan have resulted
in stories of unthinkable devastation and human loss. Because of
that country’s position as a global center of commerce and trade,
it has also provided perhaps the most sweeping example of supply
chain upheaval. This is the latest in a line of headline-making
disruptions that only seems to grow ― the economic downturn of
2008-2009, continuing unrest in the Middle East, international
terrorism, hurricanes, oil spills, port strikes, and product
recalls. These unpredictable challenges are establishing new
mandates for supply chain professionals globally.
Consider risk at all levels
“While it is impossible to foresee every natural disaster, act
of terrorism or other supply chain contingency, a consideration of
such disruptions must be part of the foundational strategic
planning process from manufacturing all the way to the store
shelf,” said Kelly Thomas, senior vice president, manufacturing,
JDA Software. “Predefining the right set of response levers to be
activated in the event of supply chain disruption helps prepare
businesses to manage supply chain contingencies based on long-term
strategic priorities instead of scrambling to make hasty,
ill-informed decisions when the unpredictable occurs.”
Because supply chain disruption is a reality – for both the
200-mile local and 10,000-mile global supply chain – JDA Software
Group, Inc. (NASDAQ: JDAS) offers the following risk-mitigation
guidelines for both manufacturers and retailers:
- Undergo a systematic analysis of the
total landed cost related to a variety of procurement strategies in
order to realistically assess the potential value delivered by a
global supply network and make informed decisions regarding risk
versus reward. It is important to make this assessment an ongoing
process, allowing for frequent plan updates as political
conditions, fuel prices, tariffs, currency exchange rates, labor
costs and other factors change.
- Create contingency plans through
detailed business simulations and what-if scenario analysis. Risk
exposure can be minimized by creating backup production and
distribution plans that include second- and third-tier materials
sources, component vendors, substitute parts and transportation
carriers. Having prioritized allocation plans allows for scarce
inventory to be allocated in the manner that makes the best
strategic sense. Having ready knowledge of alternate supply sources
and establishing substitution strategies in advance can help ensure
that product remains on the store shelf, even in the most
challenging environments.
- Ensure that contingency rules and
policies in place at the strategic level also exist at the
operations or tactical level. Running what-if scenarios in advance
at the tactical level can help companies operate through short-term
supply contingencies without significant interruption or a
long-term business impact.
- Monitor daily operating conditions on
an ongoing basis so that demand spikes, local weather events, labor
strikes and other short-term performance threats can be anticipated
and managed as effectively as possible. Since variability is a
given at the operational level, it is crucial to maintain a robust,
ongoing Plan-Do-Check-Act (PDCA) cycle that continuously monitors
and corrects any mismatch between supply and demand. A continuous
PDCA process can address minor issues before they become major
supply chain disruptions by keeping planned and actual results as
close as possible.
- Monitor supply chain activity when
disaster strikes to quickly adapt preplanned promotional and
marketing campaigns as product availability changes. Campaigns may
need to be suspended or substitution strategies initiated to ensure
that customer needs are met and that both retailer and manufacturer
can make good on their promotional promises.
- Collaborate to achieve greater
visibility from manufacturing to the store shelf. Collaboration
between manufacturers and retailers must include trust and
transparency to ensure disruptions are met with more agile and
effective responses. Building these relationships now helps ensure
that business plans are aligned and all parties are better
positioned to respond quickly with a goal of keeping products on
the shelf in even the most difficult circumstances.
”The retailer that engages in a relationship based on trust and
transparency around cross-enterprise strategies and business
planning will be in a much better position to secure constrained
supply product from a vendor,” said Jane Fazzalari, vice president,
retail industry strategy, JDA Software.
While no manufacturer or retailer can foresee every emergency,
it is critical to remember that when performance is disrupted by a
major event like a hurricane or even a minor issue at just one
supplier, long-term success lies in being prepared for any
deviation — and responding both quickly and decisively. Whether a
supply chain spans 200 miles or 10,000 miles, by identifying and
managing risk, companies can position themselves to manage through
the chaos to protect revenue, profit and market share in the event
of supply chain disruption. To learn more about supply chain risk
mitigation, please contact JDA at info@jda.com.
About JDA Software Group, Inc.
JDA® Software Group, Inc. (NASDAQ: JDAS), The Supply Chain
Company®, is a leading provider of innovative supply chain
management, merchandising and pricing excellence solutions. JDA
empowers more than 6,000 companies of all sizes to make optimal
decisions that improve profitability and achieve real results in
the discrete and process manufacturing, wholesale distribution,
transportation, retail and services industries. With an integrated
solutions offering that spans the entire supply chain from
materials to the consumer, JDA leverages the powerful heritage and
knowledge capital of acquired market leaders including i2
Technologies®, Manugistics®, E3®, Intactix® and Arthur®. JDA's
multiple service options, delivered via the JDA® Private Cloud,
provide customers with flexible configurations, rapid
time-to-value, lower total cost of ownership and 24/7 functional
and technical support and expertise.
Online:
Web: www.jda.com
Twitter: www.twitter.com/JDASoftware
Facebook: www.facebook.com/JDASoftwareGroup
LinkedIn: www.linkedin.com/company/JDA-Software
YouTube: www.youtube.com/user/JDASoftware
SlideShare: www.slideshare.net/JDASoftware
This media alert contains forward-looking statements that are
made in reliance upon the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are generally accompanied by words such as “can,”
“will,” “ensure,” “help,” “enable” and “expect” and other words
with forward-looking connotations. In this press release, such
forward-looking statements include, without limitation, remarks
that implementing certain risk-mitigation guidelines can provide
benefits to companies. The occurrence of future events may involve
a number of risks and uncertainties, including, but not limited to:
(a) certain strategies may not perform exactly as anticipated; (b)
there may be implementation and integration problems associated
with our solutions; and (c) other risks detailed from time to time
in the “Risk Factors” section of our filings with the Securities
and Exchange Commission. Additional information relating to the
uncertainty affecting our business is contained in our filings with
the SEC. As a result of these and other risks, actual results may
differ materially from those predicted. JDA is not under any
obligation to (and expressly disclaims any such obligation to)
update or alter its forward-looking statements, whether as a result
of new information, future events or otherwise.
“JDA” is a trademark or registered trademark of JDA Software
Group, Inc. Any trade, product or service name referenced in this
document using the name “JDA” is a trademark and/or property of JDA
Software Group, Inc.
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