Goals of Supply Chain operations change very rapidly in today's dynamic business scenario. In 2009, we saw the world economy (and especially US economy) dip to a low, which prompted most manufacturing and retailing companies to focus on trimming their costs to stay afloat. One of ways to cut down on costs was to reduce inventory and companies pursued that earnestly. Cutting down inventory was probably the most important goal of many supply chains as they struggled to compete against economic odds in 2009. A survey by US Census Bureau pointed out that manufacturing and trade inventory/sales ratio fell from close to 1.5 at the start of 2009 to just above 1.25 by the end of the year.
As a result, 2010 started with record low inventories in manufacturing and retail supply chain. As demand picks up in 2010, further reductions in inventory levels can only be counter-productive. Today, the topmost goal for most supply chain executives is to make supply chains more agile without drastically increasing inventories. The ability to quickly respond to increasing demand will be the key to success in 2010. And that is definitely not going to be an cakewalk for most companies. This has been borne out by this week's iPhone ordering fiasco for Apple. When Apple - which was voted as the best supply chain of 2010 by AMR - is seen faltering, other companies are definitely not invulnerable. Ultimately, the winners of 2010 would be companies that would have the agility to quickly respond to demand uptick and be able to expand their supply in rapid response to unexpected surge in demand.
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