In uncertain economic times, farsighted executives make the investments that will prepare their organizations to take full advantage of unexpected opportunities. Their readiness to take calculated risks assures the future success of their companies.
It's a daily reality for supply chain professionals that even their best-laid plans cannot account for fluctuations in supply and demand. Moreover, as the economy moves from slack demand patterns to an up tick in orders, this battleground is shifting from managing excess inventory write-offs toward managing constrained supply.
This article discusses the impact of an increase in demand on manufacturers and includes a case study on how net.com, a provider of service-creation platforms for broadband, Internet protocol telephony and multi-service networks, successfully impacted its revenue and on-time shipment performance in face of constantly changing demand.
By foregoing manual processes and implementing supply chain software that offered essential visibility across the company's supply chain to daily changes in demand, net.com was able to improve fulfillment of commitments made to customers and intelligently allocate inventory in shortage situations using pre-determined business rules, significantly improving order cycle times and on-time delivery performance.
In the end, this article describes the advantages of real-time collaboration between sales and supply chain operations, enabling companies to manage upturns in business and to use the wisdom from past missteps in a down economy to move toward a better future.
Changing Market Conditions
Although the recent upswing in business has been a welcome change, manufacturers still need to manage their supply and demand chains to prevent component shortages and to meet their revenue and market share goals.
Many companies already have felt an increase in demand and are struggling to hold down inventory levels without impacting customer commitments. However, with global inventory visibility and intelligent order fulfillment applications in place, businesses can operate successfully within an environment that enables rapid responses to fluctuations in demand and supply as they occur. net.com's experience illustrates this approach.
How net.com Met Its Latest Challenge
Since it was founded in 1983, net.com has sold networking equipment that telecommunications carriers, government and military agencies, and global enterprises have used as building blocks for high-performance, wide-area networks. With a base of over 1,750 customers in more than 75 countries, net.com is one of the first networking companies to deliver and promote service-creation platforms for broadband, Internet protocol telephony and multi-service networks.
Throughout its history, net.com has weathered several market storms, emerging successfully each time. Most recently, following the upheaval caused by the collapse of the telecommunications and dot-com markets, net.com expanded its technology and marketing focus to address the needs of two highly demanding customer bases: carriers and large corporate end users.
Such a move meant developing two separate product lines with significantly more complexity in design and production. net.com's product line includes packet gateways and switches sold as configured platforms with production outsourced to two key contract manufacturing partners. The company handles functional testing and systems integration in house.
At the same time, market conditions caused by the terrorist attacks of September 11, 2001, led net.com to experience an upturn in demand from its government customers, which now account for almost 70 percent of sales. However, doing business with the government requires an internal balancing act on a continuous basis. Once a firm accepts an order from the government, this order takes precedence over other orders in the queue. Without jeopardizing relationships with any of its partners, net.com wanted to meet all of its customers' demands, while maximizing revenue and margins by successfully managing its supply chain.