Mastering management: again this month, we present some of the best business management ideas and concepts from consultants, trainers and shop owners
Author: Motor Age

Supply chain management (SCM) has been a hot topic in the paperboard industry for some time, and the integration of lean and RFID into the chain has revolutionalized the system. The once-traditional linear supply chain, stretching from product manager to end user, is undergoing a shift to a circle that starts and ends on the retail shelf.

With competition fierce and criteria high for companies to reach that retail shelf, managing the supply chain is critical. For box converters, their role in getting a product to shelf involves much behind-the-scenes work incorporating new manufacturing processes and technologies. Most companies today focus on their internal supply chain and first tier suppliers/customers. In the near future, however, companies will expand the supply chain toward the supplier's supplier and the customer's customer with a slight shift to more customer integration, according to a recent study conducted by ELA/BearingPoint, Inc.

Retailers on average lose the sale 41 percent of the time due to out-of-stocks, says Keith Harrison, Procter & Gamble's (P&G) global product supply chain manager. Subsequently, P&G research also notes that customers will only tolerate an out-of-stock two or three times before they substitute another brand or switch stores.

Taking these statistics into account, Procter & Gamble has increased its focus on the retail shelf. P&G uses the concept of a Demand Driven Supply Network, which reacts to consumer demand to drive the rest of the supply chain rather than maintain an internally focused supply chain.