Using near-real-time information and visibility at all levels of a supply chain will enable retailers and manufacturers to improve the performance and cost effectiveness of their supply chains while mitigating risks to security of supply, says industrial and retail software group JDA International and Strategic Initiatives senior VP Razat Gaurav.

Price volatility and price increases cascade down a supply chain, eventually impacting on consumers, but retailers and manufacturers face the risk of consumers possibly not wanting to buy goods at high prices, necessitating an active management of risks arising from supply chain costs and security to safeguard profitability and sustainability.

Further, the information derived from a supply chain management system enables companies to arrange alternative sources of supply to mitigate unforeseen risks, such as natural disasters and political unrest, in the regions from where they derive their materials.

“Supply chains compete against one other in a global world where prices at source must be considered in light of other variables, such as fuel prices, which will affect logistics costs and can change buying patterns and supply security risks. Managing these risks requires companies to have a near-real-time view of their supply chains and more information sharing among links in the supply chain,” says Gaurav.

The JDA software products aim to provide manufacturers and retailers with an end-to-end single view of demand patterns and how they propagate across a supply chain to ensure a match with the amount of supply. The products also assist companies in determining the appropriate amount and range of inventory needed to supply the demand, he explains.

International best practices dictate close working relationships with suppliers and trading partners so that the companies that constitute a supply chain work together for mutual benefits.

Improvements within a link of a supply chain will benefit the companies that form that part of the link. It will also enable them to compete more effectively with direct competitors and win more business, as well as improve the supply chain as a whole, which provides benefits and reduces risks for all the companies involved, explains Gaurav.

The capabilities of these emerging regional South Africa-based retailers, bolstered by the use of supply chain management and intelligence systems, provide significant potential to improve the value derived from supply chains and intelligent sourcing, which will improve operating margins and reduce working capital, owing to effective near real-time management of supply, he concludes.