Supply-chain analysis, company viewpoints. Manufacturing companies participating in a supply-chain initiative linking manufacturers and retailers recently made the following com¬

ments on the benefits of the initiative:

“Receiving better information has allowed us to forecast and reduce inventory levels ...”

“You only produce what you need and that keeps the product and floor cost down.”

“There is more accuracy with the retailer’s needs so that we can fine tune our production scheduling.”

“The inventory levels are lower and we have less waste by not overstocking the warehouses.”

Manufacturing companies highlighted the following information from retailers as most valuable to them:

“We would like to see [the retailers] forward planning expectation oftheir sales.”

“We could use retail store level data on a daily basis and better scanner information.”

“Better forecasts, decisions about shelving and shelf allocations by retailers would help.”

“I wish we had access to each retailer’s sales forecasts and the advertisements that INVENT juseinTim^and they will be running next.”

Required 1. What are the major benefits from adopting a supply-chain approach? Use the comments on page 809 as a prompt to a more detailed discussion. Explain how these benefits can lead to increased operating income.
2. What are the key obstacles to a manufacturer adopting a supply-chain approach?