Gartner Research

Key Considerations for Optimizing Commodities in Your Supply Chain

Published: 25 August 2016

ID: G00295031

Analyst(s): Paul Lord

Summary

Compressed and volatile margins associated with the term "commodity" create concern for marketing and finance leaders. Supply chain leaders can use these four insights to create value by addressing challenges and leveraging opportunities with commodities.

Table Of Contents
  • Impacts

Analysis

Impacts and Recommendations

  • Commodity products have tangible market value and supply chain leaders can quickly convert this value to cash for margin and price risk management
  • Each commodity supply network has its own set of economics, constraints and interdependencies that supply chain leaders must analyze and manage
  • Cost competitiveness of a commodity-based supply network impacts whether supply chain leaders should pursue a "low-cost, efficient" or an "agile-margin management" operating strategy

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