When considering total costs, a company’s central materials purchasing department will often opt for global procurement. This applies to materials that are both produced in-house and sought externally in global production networks, as well as to global procurement for retail companies. Despite increased efforts to act locally, the intercontinental supply share still constitutes a significant part of the whole. Reasons for this can include purchase prices and product costs, as well as production networks, product strategies, and supplier footprints.
Several partners and departments can be involved in intercontinental supply chain planning and management, which can result in complex structures and numerous interfaces. Additionally, the parts themselves have varied characteristics such as value, seasonality, frequency of change, and variance, which affect the planning and management of intercontinental supply chains.
Segmenting supply chains reduces material throughput time, resulting in optimized intercontinental supply chain planning and management
During segmentation projects, 4flow conducts an analysis that divides the article portfolio into different supply chain segments. During this process, part-specific parameters and demand or call-off fluctuations are among the aspects examined. Specific planning and management methods are applied to each segment. They are then adjusted and implemented at points along the entire supply chain, involving each respective supply chain partner. Results of 4flow customer projects include:
- Reduced material throughput time
- Reduced transportation costs
- Reduced handling costs
- Inventory optimization
- Transparency in intercontinental supply chains
- Improved cooperation among interface partners
The accompanying change management is another success factor in segmenting global supply chains.
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Inventory optimization for global networks
In addition to inventory level optimization, global supply chain networks demand a focus on the total cost-optimized management of intercontinental transit inventory.