Analyst Insight: The critical value-add of a manufacturing supply chain comes from constantly asking, "Can we make what we sell and sell what we make?" This is sales and operations planning (S&OP): a process of constant vigilance to meet customer commitments, while optimizing scarce working capital. Supply-chain optimization efforts can benefit from approaching projects as a hybrid of S&OP and supply chain. This places the focus on value creation over functional excellence. - Jon Kirkegaard, President, DCRA Inc.

Analyst Insight: The sales and operations planning process has fairly deep roots in most companies. Research by SCM World shows that many have been able to extend the process across most internal functions. However, few companies have extended the process externally to trading partners. The incentive structure of buyers and sellers tends to set these groups at cross-purposes. Flexibility pricing can shift the incentives in a direction that forces companies to negotiate the value of flexibility. - Barry Blake, Vice President, Research, SCM World

Sue Montgomery, senior business analyst with March Networks, talks about the challenges her company faces in gaining full visibility of supply and demand, and in dealing with increasing supply-chain volatility.

Fifty-seven percent of surveyed chief procurement officers (CPOs) said short-term cost reduction is a higher priority than long-term growth in 2014, according to a new survey by Consero Group, which specializes in creating high-level, invitation-only events for senior executives. The results were reported as part of the 2014 Procurement & Strategic Sourcing Data Survey, compiled by Consero Group.