Five Reflections From Supply Chain Planning Benchmarking

Supply Chain Shaman

Benchmarking is a measurement of the quality of an organization’s policies, products, programs or strategies against standard measurements. Today, I am going to share five insights that I have gleaned from our work on Supply Chain Planning Benchmarking. Benchmarking is not Benchmarking. There are many different meanings/understandings of the term supply chain benchmarking in the industry. Figure 1: Supply Chain Planning Benchmarking Methodology Overview.

Is Inventory Waste or an Asset?

Supply Chain Shaman

This morning, unexpectedly, I found myself in the middle of a debate between my two panelists on the Planning Benchmarking Panel for the Summit. We were discussing the results of the planning benchmarking work that we have just finished, and I was sharing some insights on inventory management when one of the panelists emphatically stated, “Inventory is a waste to manage. We feel so strongly about this that we do not have an inventory planning role.”

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2019 Forecasting and Inventory Benchmark Study

Supply Chain Brain

What does best-in-class forecasting and inventory management look like? Now in its ninth year, E2open’s 2019 Forecasting and Inventory Benchmark Study is the most consistent, comprehensive and useful study of its kind. This public version of the study provides the “state of the nation” for forecasting, inventory and supply performance in North America.

Benchmarking Your Supply Chain Planning in 2017


The ToolsGroup customer base of more than 300 companies has allowed us to access a wide array of supply chain planning data for benchmarking in different industries and different circumstances. Bear in mind that it is not always easy to establish homogeneous and comparable benchmarking measurements. Overall, we found our consumer goods customers averaging forecast accuracy in the mid-80s (with monthly aggregation) with inventory levels around 25 days and service levels around 98%.

Six Steps to successful Supply Chain Benchmarking

Supply Chain Movement

The need to benchmark supply chain performance runs deep in many companies. The quest for data is critical, and can help answer questions like “what is the average and best-in-class forecast accuracy in high tech,” or “how much inventory do pharmaceutical companies hold,” or “what are typical transportation costs as a percentage of sales in consumer packaged goods (CPG)?”. The point of benchmarking is to provide information to be used in decision making and action.

Financial Benchmarking for Inventory Turns and Working Capital


Using so called orbit charts, we have benchmarked companies on EBIT% versus Inventory Turns. That benchmark helped to reveal the ‘best practice frontier’, which in turn helped in setting aggressive but aligned targets for EBIT% versus Inventory Turns. As recaptured in Figure 1, the inventory turns are a measure on the ‘cash’ side of the triangle. Figure 1 – Aligning EBIT% and Inventory Turns to align the Supply Chain Triangle.

What is Inventory Forecasting?


What is Inventory Forecasting? Wait, what has this got to do with inventory forecasting? So, for the majority of small and medium businesses, inventory forecasting is simply an inventory reordering strategy to ensure that your stock levels are in the Goldilocks zone.

Things People Get Wrong with Inventory

Logistics Bureau

What are the things that people get wrong in inventory? Robobyrne: Sins In Inventory Management. Supply Chain Secrets: Why Supply Chain Inventory Should Matter to the Finance Pros. Benchmarking Success: 5 Reasons to Care About Great Inventory Management.

An Omni-Channel Fulfillment Benchmark: How Do You Compare?

Logistics Viewpoints

Inventory Management Omni-channel logistics RetailOmni-channel fulfillment is arguably today’s hottest supply chain topic. My colleagues and I have written a number of blog posts on individual case studies on this topic. Here is a case study on an anonymous major US retailer that likely has a store location near you. How do your fulfillment operations compare to this leading […].

Terra’s Forecasting Benchmark Study 2012

Supply Chain Movement

Terra’s Forecasting Benchmark Study is a pretty comprehensive survey. Extreme error is the most costly and disruptive to the supply chain, risking revenue and customer service, and driving large quantities of excess inventory. Reports benchmark study CPG industry demand planning forecasting supply chain Terra Technology The Consumer Packaged Goods (CPG) industry faced another year of challenges from economic turbulence and weak consumer confidence in 2011.

Metrics that Matter: Inventory Effectiveness


The effective use of a manufacturer’s inventory investment is an important determinant of the company’s success. Excess and obsolete inventory is a drain on resources, as is excessive safety stock. Managing an Inventory Investment. Inventory effectiveness measures the process that delivers the right part to the right place at the right time, while minimizing investment and meeting customer requirements. Best Practices for Inventory Effectiveness.

Common Sense Warehouse Performance Metrics for Supply Chain Benchmarking

Logistics Bureau

If you’ve heard about the opportunities and benefits that warehouse performance benchmarking can put within reach of your supply chain organisation, you might understandably be keen to get a benchmarking project under way. Whether comparing performance across your own warehouses and DCs, or benchmarking your warehouse network against external organisations, there are a number of performance elements that should be taken into account. Articles Benchmarking Warehouse

Strategic Benchmarking in the Supply Chain Triangle (Part 1)


A next logical question is if we can somehow capture this from publicly available financial data and benchmark companies on this strategic level. Inventory turns are available. The Cost of Goods, also called the Cost of Sales, include all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. When benchmarking SG&A it is crucial to verify whether that includes or excludes the R&D costs.

Strategic Benchmarking in the Supply Chain Triangle (Part 2)


Deriving a strategic benchmark for Product Leadership, Operational Excellence and Customer Intimacy in the Supply Chain Triangle. From the benchmark data gathered in the previous sections and the previous blogs, we can distill the benchmark for Product Leadership, Operational Excellence and Customer Intimacy, shown in Figure 9. The benchmark is specific for the segment of the high-tech sector we have been studying. On the inventory axis we will show inventory turns.

Want to Optimize Inventory? Follow These 4 Steps

The Smart Software

Service Level Driven Planning (SLDP) is an approach to inventory planning based on exposing the tradeoffs between SKU availability and inventory cost that are at the root of all wise inventory decisions. SLDP unfolds in four steps: Benchmark, Collaborate, Plan, and Track. The post Want to Optimize Inventory?

The Supply Chain Detective™ and the Inventory Turnover Mystery!

Supply Chain Game Changer

Featuring Our 10 Best Inventory Management Articles! As I settled into the job and started learning, and studying, the various Supply Chain metrics I was surprised when I looked at the Inventory Turnover performance of the company. The Inventory Turnover Mystery had been solved!

Who’s Using TMS, Why and How? Notes from the 2016 TMS Benchmark Study

Supply Chain Collaborator

In its 2016 Global Transportation Management Benchmark Study, American Shipper reveals a great deal of data about who is using TMS, who should be using TMS and why. Retailers are among those industries most interested in TMS solutions as they work toward linking transportation management with inventory management. Are you a retailer or in another industry seeking to link inventory management to transportation management?

5 ways ERP improves inventory visibility in your supply chain


Inventory visibility is one of the critical aspects of any manufacturing business. It helps organizations understand how much inventory is available, at what location , and at any given point of time. To ensure inventory visibility, you should have access to view, manage, and update your inventory status from trusted software. What Improved Inventory Visibility does. Inventory ties up money. How ERP Improves Inventory Visibility.

End-to-End Logistics Capabilities: Best-in-Class Performance Benchmark

Oracle SCM

With the growing demands of eCommerce, it is now important for companies to gain visibility across all levels – from in-transit shipments, to inventory at both distribution center and store levels. One challenge that needs to be addressed is making sure inventory is in place to make sure the fulfillment can happen. Joan Lim , Sr Product Marketing Manager.

22 warehouse pros share the biggest mistakes made with inventory management (and how to avoid them)

6 River Systems

Managing warehouse inventory, on its face, seems a simple concept: Keep enough stock on hand to fulfill orders, but not so much stock that your warehouse is filled to the brim with inventory that won’t move for months (or years). Too much slow-moving inventory means you’re spending money to store products that aren’t earning immediate revenue, and too little means backorders and unhappy customers who are likely to seek out your competition.

Warehouse Management Software – A Blueprint for Warehouse Excellence & Inventory Management


A Warehouse Management Software (WMS) is one that helps plan, control, and manage the day-to-day manufacturing operations in a warehouse along with the guidance of inventory movement, optimizing order picking, and shipping of customer orders. What is Warehouse Management Software?

Industry Commentary: American Shipper Global Transportation Benchmark Study

Supply Chain Nation

American Shipper recently released its annual benchmark report entitled “ Global Transportation Management Benchmark Study: Climbing the Visibility Sophistication Ladder.” In this context, value is driven through increased sales, reduced inventory and improved margin attainment. The study surveys practitioners from a variety of industries as well as a cross section from a diverse organizational scale.

Reduce Costs: Invest In Talent

Supply Chain Shaman

Across the industry, we find that companies think that they are managing costs and inventory better through technology investments like supply chain planning, but they have a false sense of accomplishment. By graphing the financial metrics through orbit charts, we find that 90% of companies are stuck at the intersection of operating margin and inventory turns. Due to popular demand, we are kicking-off an organizational benchmarking effort.

How Artificial Intelligence and Global Economic Factors Affect Inventory Optimization


Through the targeted use of Artificial Intelligence (AI), Machine Learning and other technologies, leading global innovators are constantly trying to enhance the effectiveness of their inventory management. What one can’t ignore, however, is all the external factors that also directly, and indirectly, affect inventory processes.

Why Our Goal Should Not Be an Integrated Supply Chain

Supply Chain Shaman

Companies that achieve balanced scorecard results–above their peer group in cost, growth, customer service, inventory, and asset management–are good at horizontal processes (revenue management, S&OP, new product launch, and supplier development). A focus on business process alignment across functions, through horizontal processes like Revenue Management, Sales and Operations Planning (S&OP), Inventory Management, New Product Launch, and Supplier Development.

Warehouse Management Software – A Blueprint for Warehouse Excellence & Inventory Management


A Warehouse Management Software (WMS) is one that helps plan, control, and manage the day-to-day manufacturing operations in a warehouse along with the guidance of inventory movement, optimizing order picking, and shipping of customer orders. The WMS guides the overall order and inventory replenishment on the factory floor. The Software is usually used alongside or integrated with a Transportation Management System or an Inventory Management System.

How to Track and Benchmark Your Success into Cloud Adoption


If you want to track and benchmark your successes with your cloud adoption, here are some key performance indicators (KPIs) that demonstrate the value of your choice. IT staff – When you adopt something like a cloud-based online inventory management software, it’s going to come with questions and necessary support at first. Power costs – A cloud-based online inventory management system is great, but a lower power bill is even better!

A Quick Method for Assessing Inventory Health


Last week we discussed a Gartner framework for gauging inventory health, but noted that the Inventory Quality Ratio (IQR) could take a while to implement ( Click here to read last week’s blog). This week we look for a relatively quick way to assess inventory health, so we turned to Gerrott Faulkingham, solutions architect at ToolsGroup. "It This is different than traditional ABC inventory classification (to see why, see this blog ). Inventory Optimization

History Repeats Itself Without Supply Chain Leadership

Supply Chain Shaman

Tom, the colorful warehouse manager, constantly heckled Frank for the increasing inventory levels while Ed, the quiet material/logistics manager, constantly questioned if there was a better way. The first step in the development of a strategy is benchmarking.


Supply Chain Shaman

When we started benchmarking companies, Deborah and I had a friendly wager. I also believed that this company would have the best inventory and customer service. Deborah and I benchmarked 97 supply chains; and, we found the inverse to be true. It is one of the primary reasons why nine out of ten manufacturing companies are stuck at the intersection of operati ng margins and inventory turns.” Misnomer (n): A wrong name. The misuse of a term or name.

Stack It High and Watch It Fly: Is Vertical Inventory Storage Always the Answer?

6 River Systems

And this made sense when warehouses were truly pass-through for inventory. It used to be that you would source, manufacture, store, send to a store and then the consumer would access that inventory. Inventory now has to be much more nimble and therefore supply chain nodes can no longer resemble their static nature of old. In response, supply chain professionals have to consider the importance of the velocity of their inventory when designing and operating their supply chain.

2016: Building a Balanced Scorecard for Discrete Industries

Supply Chain Shaman

For the discrete industries, we contrast the industry averages for growth, operating margins, inventory turns, cash-to-cash cycle, revenue per employee and SG&A ratio for the periods of 2006-2014 and 2011-2014. Inventory Turns. Progress on inventory turns is declining due to business complexity. Inventory tactics to right size buffers and manage the form and function of inventory matter more than ever. While progress on inventory turns is declining.

2016: Building a Balanced Scorecard for Discrete Industries

Supply Chain Shaman

For the discrete industries we contrast the industry averages for growth, operating margins, inventory turns, cash-to-cash cycle, revenue per employee, and SG&A ratio for the periods of 2006-2014 and 2011-2014. Inventory Turns. Progress on inventory turns is declining due to business complexity. Inventory tactics to right-size buffers and manage the form and function of inventory matter more than ever. 2016 is around the corner.

Using Key Performance Indicators to Benchmark The Success of Cloud Software Adoption


Cloud software solutions cover a broad range of business services and organisation may adopt a variety of cloud inventory solutions for such areas as inventory control , customer relationship management, warehouse management, financial and accounting activities. Governance means you should have full visibility of your cloud inventory, where the money is being spent and how well cloud inventory is being utilised. Cloud inventory tools.

Dealing with Aged Inventory


Those in the business of selling goods will have at least a vague understanding of the nature of excess or obsolete inventory, and the effects these forms of inventory can have on the business holding them. A related inventory type is known as ‘aged inventory’. In this article, we define aged inventory and outline the implications it can have on inventory management and the success of a business overall. What is aged inventory?