Managers typically look at the big picture when measuring and managing the financial aspects of their businesses. They simply do not have the resources to look at the small pieces that make or lose money. Collaborative Commerce software has changed that, though. By making all of the working parts visible, managers easily measure and manage all aspects of their supply chains. This helps them save lots of money and increase their profits.
How it Works
First, companies must decide what they want to measure across the supply chain. For instance, they can measure the manufacturing processes of their trading partners. They can look at the manufacturing process for each product and compare them across the board. This is much more detailed than just looking at the big picture.
Then they need to synchronize their information systems, processes and controls in order to streamline their reporting processes. Reporting should break down the cost and profit for each item that is manufactured. This will help companies identify issues in the supply chain. They will find out where they are losing money and what they can do to increase their profits. They can modify conditions and optimize the system to make more money.
Why it Works
Long cycle industries cannot avoid external issues but they can increase their control over their internal operations. This allows them to cut costs so they are better prepared to deal with external problems such as shifts in demand and changes in raw materials. It also helps companies be more efficient which helps them considerably during lean times. They are able to stay on their feet, even when the industry is hurting.
This also helps companies reduce their exposure to risk while also reducing the amount of capital they need to fund their businesses. That alone makes companies more profitable and it makes supply chains more efficient. It also makes them look much better to investors.
Micromanaging has been a dirty word in the past, but that is changing. The right systems increase visibility and make micromanaging less intrusive while providing excellent results. Solid supply chains provide all data, even the minor pieces, to help managers see the big picture. This is how companies catapult into the global marketplace and leverage their positions to increase their profits. It is also how they trim the fat from their bottom lines. That helps them thrive during the good times and persevere during the lean times.