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In today’s architectures and functional metrics, value optimization does not exist. And, when procurement and tactical planning operate in isolation, there is no decision support framework to guide the trade-offs especially when the functions are tethered to different and conflicting metrics. You are right. The reason?
In follow-up qualitative interviews, one of the largest issues with organizational alignment was metricdefinition and a clear definition of supply chain excellence. To manage continuous improvement, companies need a clear definition of excellence and organizational alignment to that goal. What Drives Value?
What is an easy definition? There is no class of technologies, or common definition, for “control towers.” The focus is on functional metrics, but are unable to get to overall supply chain metrics. The next time that someone in a meeting mentions the term control tower ask for a definition. Business Use Cases.
Functional metrics align to bonus incentives, but progress in supply chains remains evasive. The ontology encompasses clear naming, and definitions of the categories, properties, and relations between concepts, data, or entities. Ontological definition is a new role for the Supply Chain Center of Excellence.
A lack of standardized ESG metrics across industries and regions makes it challenging to consistently evaluate and compare supplier performance. Without common definitions, ESG assessments can be inconsistent or incomplete. Visibility typically decreases beyond immediate (Tier 1) suppliers.
Over the past decades the definition of the supply chain has become narrower with a focus on supply and improving enterprise efficiency which decreases resiliency. Functional Metrics and the Lack of Alignment to Strategy. I think that the answer has five parts: The Belief that the Industry Has Best Practices. Clarity on Value.
Philip, and other supply chain planning sales teams, have profited over the decades on the back of the historic definition of supply chain planning. For 80% of industries, the supply chain metrics represent more than 40% impact on value. Today, companies measure too many metrics without a clear definition of value.
The issue is that when companies optimize functional metrics, they throw the supply chain out of balance and sub-optimize value. This could all change if we discard our current definitions of supply chain planning and start anew. The next step is to throw away the conventional definition of supply chain planning.
Flowcasting: The definition is a sell-one/make-one logic using flow from the channel to guide planning logic. CPFR: Collaborative Planning, Forecasting and Replenishment garnered great fanfare late in the 1990s. The building of collaborative processes remains an unfulfilled goal. The problems are many.
Supply chain reports are data-driven documents that provide key metrics and insights into various aspects of your supply chain, including: Inventory Levels Tracking stock levels in real-time to ensure adequate inventory to meet demand while minimizing holding costs. What are Supply Chain Reports?
1) Get Clear on the Definition of Supply Chain Excellence. While Joe is trying to balance the feedback from Filipe and Frank, he is often asked to change his metric targets by his CFO named Lou. Lou’s definition is based on his experience at General Electric. Achieving Balance in Metrics. I have three.
We consistently see that companies focused on functional excellence–a focus within a functional silo like manufacturing, transportation or distribution– or singular metrics– like inventory or costs– underperform against their peer groups. Reward teams for cross-functional metrics. This is the goal of this post.
The relationship between corporate financial performance and supply chain metrics was complex; and in my first attempts, I was unable to derive a correlation. I wanted to better understand which metrics truly mattered. Definitions. The Metrics That Matter Are Different by Industry Sector. I wanted to know more.
As an analyst, I am always searching for answers and clear definitions. Companies became less clear on the definition of supply chain excellence and how to implement decision support technologies. This increasing gaps in alignment and clarity of the definition of supply chain excellence was an unspoken risk entering the pandemic.
Clear operating strategy and definition of supply chain excellence across plan, source, make and deliver. There is a clear definition of the role of the supply chain in the delivery of value. Definition and alignment on why should make a decision and what a good decision looks like. Drives Value. S&OP is a business process.
Using balance sheet data from 2011 to 2019, we chart companies’ progress by peer group on rate of improvement and performance in the metrics of growth, operating margin, inventory turns, and Return on Invested Capital (ROIC). Our goal is to continually redefine the definition of supply chain excellence.
How aligned do you believe your organization is to drive these metrics? Leaders align metrics and processes to focus on customer service reliability and hold all teams accountable for a balanced scorecard of Growth, Operating Margin, Inventory Turns, Return on Invested Capital (ROIC), and Orders Filled On-time and Complete (OTIF). (
Companies with traditional definitions of marketing and sales struggle to beat the competition. A clear definition of purpose and alignment of business process to corporate strategy is an apparent characteristic of companies that outperform. They lack of a standard definition for supply chain excellence adds to the confusion.
Many believe that an ex-supply chain exec knows the definition of supply chain excellence. The industry assumes that since the person led a supply chain that they are clear on the definition of supply chain excellence. Here, I share my insights: Companies Struggle with the Definition of Supply Chain. The issue is ubiquitous.
Definitions: Oxymoron: The combination of contradictory or incongruous words (such as cruel kindness) Juxtaposition: The act of placing words or concepts close together or side by side, for comparison or contrast. Today’s definition of supply chain planning is my starting point. What is supply chain excellence?
Interview for Metrics That Matter. My kitchen table is piled high with interviews for the upcoming book, Metrics That Matter. I recently interviewed him for my upcoming book, Metrics that Matter, that publishes in August 2014. Which metrics do you think matter to supply chain excellence? ” Supply Chain Leader.
In our recent report on defining supply chain visibility in B2B networks, we provide a definition based on a research study of over seventy participants. I am working on the plot… Let me know what you think happens to Joe (the character in Metrics that Matter that does not want to be the average Joe) in the next edition.
The AMR Top 25 was the first methodology that tried to connect financial metrics with supply chain excellence. It elevated the discussion on supply chain excellence and drove more discipline and rigor in the use of financial metrics. See how different the progress is on this metric by industry? The intent was good.
Team play requires clear rule-definition, timekeepers, referees, and coaches. The root issue is the lack of a clear definition of supply chain excellence and the road rules by organizations. ” My reply is a tangled web of realizations, but let’s start with the definition and then explore the issues. ” Ideo.
The dictionary definition of a Catalyst is: An agent that provokes or speeds significant change or action. Internal Perspective: Performance Monitoring: KPIs and Metrics: Establish key performance indicators (KPIs) to monitor distributor performance. Remember our definition of a Catalyst? And it’s not just about the contract.
While teams wave their hands and talk digital, I find digital projects ideas lack definition, clarity of process, and success. Let’s start with a clear definition. To accomplish this goal, companies need to get clear on the role of planning, the definition of supply chain excellence, and democratize planning. What Is AI?
Definition Anomaly: something that deviates from what is standard, normal, or expected. Definition As I follow the evolution of supply chain technology, I am struck by what I see as a stream of paradox and anomaly, and the tendency of supply chain leaders to cling to convention. Measurement.
But before you start measuring everything in sight – and a few things not in sight – start with a set of thoughtful intentions and questions that will guide you to the right set of metrics and the right set of expectations. Cash-Cash Cycle Time; Return on SC Fixed Assets; Return on Working Capital ASCM SCOR Metrics, Supply Chain Council.
Don’t assume that there is a standard definition, and just because a 3PL signed a contract to deliver it, don’t expect that you are working on the same definition. Some of the packages on the trucks moving right now are the first shipments of Metrics that Matter. Define, audit and pay for premium service.
Their career paths, their identities, and their comfort zones were steeped in the traditional definitions. Most companies think that they know what this means; but, to be actionable they need definition. This starts by clearly defining the roles of each function, and then focusing the cross-functional teams on the same metrics.
But that definition is no longer registered.”. The definition of 4PL is continuously evolving. Managing several 3PL partnerships would constitute a 4PL under that definition, but as the definition changes, it can include other service providers too. 5PLs and the Rise of Transportation-as-a-Service.
It permeates corporate strategy, but it lacks definition. Yesterday, I published a report on the first piece of my definition of the Supply Chain Index which we will launch in April. I am hearing it again in my interviews for the book Metrics That Matter. I find it refreshing.” ” Quote from a reporter this morning.
For organizations layered in functional metrics and driving a cost agenda, this is a tough nut to crack. Challenges Traditional definitions of supply chain excellence focus myopically on cost but are too slow in making decisions in inflationary periods. Tougher than most understand. Companies participating get a copy of the results.
Despite goals to improve agility and resiliency, functional metrics for manufacturing efficiency continually throw the supply chain out of balance. The first step is the definition of a clear strategy. The second step is to align metrics to the strategy. A focus on cross-functional metrics improves supply chain resiliency. (I
Closing the gaps happens when there are aligned metrics, clarity of vision and aligned planning processes. For clarity, the definitions are: -Strategic Planning: The frequency is either monthly or quarterly and the focus is on long-term planning. Metrics Alignment. They lack cohesion. Many are not.
Cost-efficient meaning Formula for cost efficiency Cost-effective definition Formula for cost-effectiveness Cost efficiency online calculator Benefits of cost efficiency for your company Steps to improve cost efficiencies Frequently asked questions about cost efficiency Cost-efficient vs. cost-effective: What's the difference?
Interview with Lora Cecere, Founder and CEO of Supply Chain Insights and Author of Supply Chain Metrics that Matter ( published December 2014 ). Metrics that Matter became a three year research project. I realized that many organizations are very confused about metrics. So I started this book as a summary of this research.
We talk about the move from functional metrics to a balanced scorecard, but we don’t use a balanced scorecard as an objective function. Few companies are clear on the definition of supply chain excellence and what makes a good plan. We talk about complexity, but do not measure the impact on forecastability.
Shown in Figure 1 is the definition of the layers of outside-in planning. Based on the work with Georgia Tech, we are getting clear on which metrics matter by industry. As companies adopt a balanced scorecard, the functional metrics shift to a focus on reliability. Can you describe the outside-in model?
Pawn Definition: “A chess piece of the smallest size and value. The metrics were not aligned. Map the different metrics and incentives in the organization to behavior. He loved chess, and I was a reluctant participant. I played because I loved my dad, but I never was good at the game. Don’t dwell on the negatives.
This blog explains The Key MRP Metrics in Supply Chain whcih every supply chain professional in Manufacturing or Distribution Businesses. The metrics that underpin MRP could be described as the balls in this juggling act. This article takes an in-depth look at the crucial metrics every supply chain professional needs to know.
The students learn that there is no definition of end-to-end planning because the current taxonomies for modeling are fragmented. Lack of aligned metrics. Clear charters and definitions matter. The class discovers the current blackholes of the supply chain (direct procurement and contract manufacturing. Lack of executive buy-in.
Definitions: Provocateur. It starts with the lack of a clear definition. Or agreement on the definition of supply chain excellence. Sometimes, even the definition of a supply chain is not clear. An orbit chart is a plotting of data at the intersection of two metrics. ” Incrementalism. Movement by degrees.
In our first post on the use of gamification as an employee attraction and retention tool, we shared a short definition and dove a little deeper on two of the three pillars of gamification, personal pride and socialization. Leaderboards on any manner of metric are an easy example of competitive gamification.
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