Fall 2013 Issue of Horizons

MANUFACTURING & DISTRIBUTION

Supply Chain – Push or Pull? by Mike Lewis, CPA

O ptimizing your supply chain has become a key driver for success for manufacturing and distribution companies. Being able to deliver the right product at the right time to the customer has become a baseline expectation. Companies have made significant investments in Enterprise Resource Planning (ERP) systems to help them manage their supply chains. But ultimately, most companies maintain large amounts of inventory to help buffer customer demand and ensure that customer expectations are met. This “inventory buffer” can be an effective way to meet

customer demand, but requires a significant investment of cash made by the company.

This was the topic of recent Lean Roundtables held in June and August at RubinBrown’s St. Louis and Kansas City offices. Traditionally, improvement efforts are focused on the demand creation and planning side of the supply chain (see the graph on page 31). These improvement efforts include the automation typically used to manage purchasing, which includes ERP systems as well as demand forecasting. In a survey of attendees, more than two-thirds of those

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