How Much Does Your Supply Chain Really Cost?

Avnet, Optiant ally to help companies assess current strategy, identify inefficiencies, design more profitable value chains

Avnet, Optiant ally to help companies assess current strategy, identify inefficiencies, design more profitable value chains

Phoenix — June 8, 2005 — Avnet Electronics Marketing and supply chain visibility specialist Optiant have formed an alliance intended to help high-tech manufacturers and consumer electronics companies systematically and scientifically assess their current supply chain strategy to identify inefficiencies and reach a clear understanding of the true cost of their supply chain.

The two companies are partnering with supply chain and knowledge management consulting firm eKNOWtion on the project, which aims to arm companies in highly competitive markets with the tools they need to improve their current supply chain models.

As Avnet and Optiant see it, most companies today have inefficiencies in their current supply chains, places where the inventory buffer is too high and instances where lead time is not correctly accounted for, all of which contribute to the total supply chain cost.

A Targeted Supply Chain Diagnostic

In today's competitive environment with ever-shrinking time-to-market cycles, ensuring the most efficient supply chain with the proper balance of inventory in the pipeline at the appropriate time is more crucial than ever before, the two solution providers assert. A manufacturer, they say, that can operate at the lowest total supply chain costs can also win with customers, the marketplace and shareholders.

With an eight-week consulting engagement, the alliance between Avnet, Optiant and eKNOWtion is undertaking to deliver a targeted supply chain diagnostic for a given product line, based on the unique customer's requirements and targeting three critical operational challenges:

  • Right-sizing inventory levels and locations;

  • Optimizing supply chain parameters for high customer-service levels; and,

  • Quantifying the impact of various strategic sourcing options.
Optiant said that its own customer experience has shown that manufacturers that act on the recommendations provided by these analyses routinely realize top-line growth and bottom-line savings within 90 days.

Running the What-ifs

"Correct supply chain management is so critical to our customers," says Greg Frazier, Avnet executive vice president for supply chain services worldwide. "We're always looking for new ways to help them achieve efficiencies. This alliance is a great opportunity for OEMs to delve into their supply chain models and see where they can root out inefficiencies."

Leveraging the modeling and analytical reporting capability of Optiant's PowerChain Suite, eKNOWtion's consultants will work with a cross-functional team from each customer to model the end-to-end supply chain, using various pricing and lead-time scenarios from global component suppliers. Optiant said its software helps manufacturers by creating an end-to-end view of the supply chain, enabling users to evaluate multiple what-if scenarios to determine ideal configurations to accommodate short product lifecycles, rapidly fluctuating demand and long-lead subcomponents sourced overseas while protecting profit margins.

The project is intended to deliver the optimal supply chain scenario with correct inventory stocking levels and locations. Avnet said its global resources, know-how and service offerings ensure the analysis and recommendations are appropriately framed and conducted to drive maximum cost-savings.

The Supply Chain Diagnostic will be offered to Avnet Electronics Marketing customers in the Americas and EMEA (Europe, Middle East, and Africa) regions.

Additional Articles of Interest

— Is your company getting the most from its supply management function? For a step-by-step look at how to phase in a successful "end-to-end" supply management strategy, read the article "Roadmap to a Comprehensive Supply Management Strategy," an In Depth article on

— A survey of consumer healthcare decision-makers shows opportunities for manufacturers to gain competitive advantage by focusing on some key points in their supply chains. Read more in the In Depth article "Leveraging the Supply Chain for Competitive Advantage."

— For more information on the supply chain initiatives underway at Avnet, read the Supply & Demand Chain Executive articles "Architecting Agility" (April/May 2002) and "The World Is Enough" (August/September 2004).

— Lean is still a top priority for many organizations, and now leading enterprises are applying lean principles to the supply chain. Read about the challenges in building a "lean supply chain" in "The Value of Being Out-of-stock (Almost) Everywhere," the Final Thoughts column in the April/May 2005 issue of Supply & Demand Chain Executive.