This site uses cookies to improve your experience. To help us insure we adhere to various privacy regulations, please select your country/region of residence. If you do not select a country, we will assume you are from the United States. Select your Cookie Settings or view our Privacy Policy and Terms of Use.
Cookie Settings
Cookies and similar technologies are used on this website for proper function of the website, for tracking performance analytics and for marketing purposes. We and some of our third-party providers may use cookie data for various purposes. Please review the cookie settings below and choose your preference.
Used for the proper function of the website
Used for monitoring website traffic and interactions
Cookie Settings
Cookies and similar technologies are used on this website for proper function of the website, for tracking performance analytics and for marketing purposes. We and some of our third-party providers may use cookie data for various purposes. Please review the cookie settings below and choose your preference.
Strictly Necessary: Used for the proper function of the website
Performance/Analytics: Used for monitoring website traffic and interactions
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?
While past efforts focused on meeting compliance requirements, organizations are now working to proactively embed environmental, social, and governance (ESG) principles into their sourcing, production, and distribution activities. Without common definitions, ESG assessments can be inconsistent or incomplete.
What is an easy definition? There is no class of technologies, or common definition, for “control towers.” While there are many types of visibility (see Figure 1), the most common use case is either sourcing or transportation visibility. The focus is on functional metrics, but are unable to get to overall supply chain metrics.
(Inventory is both our most important buffer and greatest source of waste.) Functional metrics align to bonus incentives, but progress in supply chains remains evasive. Muda comes from many sources. An ontology guides the learning by defining a set of terms and relational expressions that represent the core definitions.
The issue is that when companies optimize functional metrics, they throw the supply chain out of balance and sub-optimize value. We have not designed the planning systems to serve managers, directors, and vice presidents, aiming to improve decision-making and collaboration across the source, make, and deliver processes.
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.
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.
This blog explains what a successful procurement strategy looks like in 2025, including a working definition, a strategic procurement framework, and the key steps to building one. Instead, focus on metrics such as cost avoidance, on-time delivery rates, or percentage of spend on supplier diversity.
The relationship between corporate financial performance and supply chain metrics was complex; and in my first attempts, I was unable to derive a correlation. The year 2012 marked the 30th anniversary of the use of supply chain management as a cross-functional process for source, make and deliver in the commercial sector. Definitions.
This blog explains what a successful procurement strategy looks like in 2025, including a working definition, a strategic procurement framework, and the key steps to building one. Instead, focus on metrics such as cost avoidance, on-time delivery rates, or percentage of spend on supplier diversity.
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. Governance.
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.
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. The source data for the analysis comes from Ycharts.). Leadership. Outside-in Processes.
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?
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. Build in-market sourcing. Tougher than most understand.
The team was organized around the functional silos of source, make and deliver. 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. It had been this way for over two decades.
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. The investments in new approaches and deploying outside-in processes enables quicker sensing and bi-directional orchestration across source, make, and deliver.
This blog offers a clear, practical overview of what spend analysis is, how it supports strategic sourcing, and why it matters for both direct and indirect procurement. We’ll walk through key benefits, types of spend analysis, steps to get started, and metrics to track—backed by lessons learned from real-world implementations.
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.
This week, at Supply Chain Insights LLC, we published our 11th report in the series titled Supply Chain Metrics That Matter. When companies look at singular metrics (labor costs or inventory), they have moved backwards. Aligning metrics matters. Functional metrics in isolation degrade value.
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.
It is critical to monitor inventory effectiveness using five key metrics: Expedited orders, inventory turns, obsolete inventory, safety stock and stockouts. Using Metrics to Measure the Health of the Business. Companies use these metrics to minimize their investment in inventory without adversely affecting customer service levels.
Integration of corporate social responsibility metrics in planning. Comprehensive view of source, make and deliver. Most often the focus is on transportation or logistics, but does not take into consideration the trade-offs between make, source and deliver. Focus is on make, source and deliver together.
Of the professionals surveyed, 59% saw the gap between procurement/sourcing and supply chain to be a major disconnect, and the most pressing pain point. By ARC’s definition, when a business spend management solution is used for direct procurement it is an MSCN. Networks and Sourcing.
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?
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?
The only solid case study about supply chain risk is definitely from Cisco System. However, the logic Cisco uses to manage the disruption is very robust and details are summarized into the infographic below, Note: metrics data is for illustrative purpose. Metrics look very simple and its kind of nice to have something like these.
The next posts in the series will break down metrics and issues to consider in SQM by industry and conclude with a case study on the application of SQM. 5 Key Metrics to Use for Scoring Supplier Quality Management (From LNS Research ). 5 Key Metrics to Use for Scoring Supplier Quality Management (From LNS Research ).
This is because most classical planning solutions lack the modeling capability and computing power to accommodate different data sources, large SKU count, and detailed constraints and contingencies to build an immediately executable plan. each with discrete plans generated typically in sequential batch runs.
Most supply chain leaders cannot get their groove on because they generalize–the use of the same metric targets and tactics for the supply chain without paying attention to the flows. Wrong Metrics. The tactics need to align with the flows based on volume and variability. 5), an intermittent supply chain (COV of.5-1.5),
From the Purchase Order (PO) Status Report to the RFQ Performance Report, each report is dissected to provide a clear definition and a deeper understanding of its significance. Join us on this exploration as we uncover the definitions hidden within the realm of procurement reports and access free sample reports!
I have taken myself off the road to write the book Metrics That Matter. Supply Chain leaders will state in one breath that they want to be innovative and try new technologies; however, in the next sentence, they will ask for a statement of a definitive Return on Investment (ROI) for a project. It is a slow week. It is tedious.
Financial reengineering focuses on the optimization of short-term results that are usually based on a functional analysis of source, make, or deliver. Few consultants understand the interrelationships between source, make and deliver. Snow fell last night as I worked on my last Supply Chain Metrics That Matter report.
To understand supply chain excellence, Abby and I have been studying pattern recognition for industry peer groups at the intersection of the metrics in the Supply Chain Effective Frontier of growth, profitability, cycles and complexity. The Gartner Top 25 methodology, by definition, is biased to reward the high-tech and electronics industry.
Definition: “Someone’s efforts, resolve, or viability are tested; things are meaningfully challenging. Make, source, and deliver need to be managed together based on analytics that sense and respond at the speed of business. “ Wikipedia. These capabilities do not exist at Ford. Conclusion.
That sounds more like a slogan than a practical definition. IBP will expose data silos and data turf wars, as well as multiple definitions for seemingly straightforward concepts like “forecast” and “demand.” Be prepared to work hard developing a single source of truth. A GPS for your business? 3) No Clear Goals.
When I think of the definition of the word agility, I think of Gumby, pictured here. One of the largest issues for organizations to drive supply chain agility is the lack of a commonly held and well-understood definition. In the supply chain, variability and volatility come from many sources. Defining Agility. Is it S&OP?
I think about this discussion with Keith often as I work on the Supply Chain Index and edit the chapters of Metrics That Matter. This includes the decision to build, the digital definition of the product, the decision of when and where to ship, and the decisions of which materials to put into which products.
Apple Inc purchases raw materials from various sources then get them shipped to an assembling plant in China. Some components are currently obtained from the single or limited sources. So this section will explain some characteristics of Apple Supply Chain through various metrics and compare them with Amazon Supply Chain.
I was writing the book, Bricks Matter and I wanted a better definition of Supply Chain Excellence. This research was the backbone of the Supply Chain Metrics that Matter series of reports. Instead, they have measured functional metrics or focused on projects. It started at my kitchen table. The Building of the Index.
Source Merriam-Webster Dictionary. The first definition of Demand-driven Supply Chains was pushed into the market by AMR Research (now part of the Gartner Group) in 2004. Cloud-based analytics for sourcing and the management of supplier networks are evolving and should be embraced. The acronyms keep coming….
I did not think that anyone had a clear definition of supply chain excellence. Using new technologies in traditional process definitions reduces the potential for value enablement. Companies want a definitive Return on Investment (ROI), limiting the opportunity to test and learn with new technologies. I disagreed.
We organize all of the trending information in your field so you don't have to. Join 102,000+ users and stay up to date on the latest articles your peers are reading.
You know about us, now we want to get to know you!
Let's personalize your content
Let's get even more personalized
We recognize your account from another site in our network, please click 'Send Email' below to continue with verifying your account and setting a password.
Let's personalize your content