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In 2016, we finished a study on continuous improvement. In the study, when we asked for the top elements of business pain to drive continuous improvement for companies greater than 5B$ in annual revenue, as shown in Figure 1, we found the largest issues with cross-functional alignment and availability of talent. What Drives Value?
The use of orbit charts allowed me to see the patterns of performance at the intersection of metrics over time. For the past decade, I have been studying these patterns. We purchase data from Y charts. (A As an aside, I do not think that Lenovo is an example of a supply chain excellence. Consider Lenovo in Figure 1.
The award, based on beating the industry peer group on rate of improvement on the key metrics of growth, operating margin, inventory turns, and Return on Invested Capital (ROIC) while outperforming their peer group, is tough to achieve. The orbit chart below illustrates L’Oréal’s performance at the intersection of two metrics.
Supply chain excellence is easier to say than to explain. After two decades of study, I think because it is a lack of understanding. At each company, there is a relationship between the metrics of growth, margin, inventory, customer service, and asset strategy. A Case Study. The reason? Discontinued in 2011.
” Followed by “How are you organized, and what defines functional excellence? And, how do you tie functional excellence to corporate value?” Companies became less clear on the definition of supply chain excellence and how to implement decision support technologies. Functional Metrics.
Reason #4 Making key decisions by modelling the supply chain in Excel. Reason #9 Relentless pursuit of one supply chain metric at the expense of other metrics. Social studies? Yet, these are similar instructions as what is passed down to the supply chain from executives focused on a specific supply chain metric.
How aligned do you believe your organization is to drive these metrics? Observations on What It Takes In the Mea Culpa post, I wrote that I used to believe that excellence in S&OP was a ratio of 60/30/10. (60% One of my favorite case studies was Campbells in 2014. See the World Kitchen case study in the Agility Report.
In my forty years of studying supply chain planning, the groups became larger, but with questionable results. For example, in my qualitative research studies, I find few can answer the questions of what defines a feasible plan, how to measure inventory effectiveness, or how to tune and refine models. Lack of aligned metrics.
I am currently working on a couple of case studies for this blog on how business leaders used digital twin modeling during the pandemic. Initially, the output was published to procurement to design strategic buying strategies. Watermelon Metrics Don’t Drive The Right Results. I love the metaphor of watermelon metrics.
For the past five years, the team at Supply Chain Insights identified Supply Chains to Admire Award Winners by analyzing performance by peer group on the key metrics of growth, operating margin, inventory turns and Return on Invested Capital (ROIC). The total cost of ownership analyzes the total costs of the buying decision.
Ed argued that instead of buying new packaging equipment that we should work with R&D to have a base flavor and add the color and flavoring at the head of the machine. Despite goals to improve agility and resiliency, functional metrics for manufacturing efficiency continually throw the supply chain out of balance. The So What?
Theme 2: Online buying will fuel home delivery growth, challenges and new strategies. In the same ecommerce study, over 72% of consumers experienced a delivery failure over a three-month period. The only bright note is that shipping costs will be a fraction of what they were over the last several years. Figure 1: U.S.
I have learned that supply chain systems are more complex than I originally thought, and that the relationships between supply chain metrics are nonlinear. Along the way, I will be doing more work on network design case studies. I would build an expertise system in the Supply Chain Center of Excellence. Where Would I Start?
Think of them as apples and gearseach essential and effective on its own, yet when combined; they create a formidable mechanism for achieving procurement excellence. A 2023 Deloitte study revealed that companies using strategic sourcing models saw a 15% reduction in procurement costs.
While there is work within SAP to rethink SNC and use the assets purchased with Ariba to build multi-tier capabilities, the progress is not encouraging. the company is owned today by 20 organizations representing manufacturers, distributors, hospitals and group purchasing organizations (GPOs). Marketplace Rebirth.
Or agreement on the definition of supply chain excellence. As a result, functional excellence anchors action. The focus is on digitization—automating today’s processes—versus rethinking process excellence based on the art of the possible. An orbit chart is a plotting of data at the intersection of two metrics.
Nick Lynch is the Global Excellence Manager at Shell Lubricants, a division of Shell Global. Completed in 2012, the ERP project forced the company to standardize organizational design, roles, and metrics. What can often look like compliance in APO could actually be numbers calculated in Excel and posted into the SAP system.
By purchasing planning and transactional systems for a common vendor, they had one throat to choke and they were familiar with the architectural elements. In the study, the respondents were asked to rate time to Return on Investment, and satisfaction. In addition, I am now done with the page proofs for my new book, Metrics that Matter.
This team is not buying the message. “I study supply chains. So much so, that three years ago, I founded a research company to focus on understanding supply chain excellence. In our work, we tie research from quantitative and qualitative studies to financial results to drive new insights. I am passionate about it.
Gartner purchased the firm in 2010.) Driving Improvements in Supply Chain Excellence. He felt strongly that supply chain leaders knew how to drive supply chain excellence and needed a forum– or maybe two or three depending on the business model– to help them network and refine their approaches. I disagreed.
It was a story where people believed that functional excellence leads to supply chain superiority. Year after year, well intentioned people toiled against improving metrics that reduced, not improved, the effectiveness of the supply chain. Metrics comparison of Kellogg Co. A Case Study. You got it!
I think about this discussion with Keith often as I work on the Supply Chain Index and edit the chapters of Metrics That Matter. Our current processes and dependencies on Excel spreadsheets cannot get us to our goal. E2open last week announced the purchase of Serus. I believe that value is what you create. 3) Risky Business?
There is an inverse relationship between margin and supply chain excellence. In doing studies of different industry subgroups, we find that the medical device industry is resilient. Zimmer’s strategic framework focuses on growth, operational excellence and prudent capital allocation. It matters more. My Challenge.
Here is a link to the healthcare research study in the field. They each lag in their understanding of supply chain excellence, and are now struggling to build effective supply chain teams. Hosting this webinar series is one of the favorite parts of my job as the Founder of Supply Chain Insights. Current State: Costs are rising.
Case Studies. Cisco System Case Study. The only solid case study about supply chain risk is definitely from Cisco System. The company won the ISM 2012 Award for Excellence in Supply Management (category:process). Metrics look very simple and its kind of nice to have something like these. A Case Study.
Driving an excellent supply chain depends on how people are recruited and managed, processes, and the technology used. In the annual report where they report on their key performance indicators (KPIs), they don’t just report on core financial metrics and the NPS, they also have people metrics. Getting the Most out of People.
It is hard work to maintain the status quo in metrics performance. A balanced portfolio of metrics delivers the greatest value. Companies balance supply chain metrics better in good times than bad. Growth in car buying stimulated the value chain. 2) Focus on a balanced portfolio of metrics. Most are treading water.
The network senses, translates, and orchestrates market changes (buy- and sell-side markets) bidirectionally with near real-time data to align sell, deliver, make and sourcing organizations outside-in. An example of social listening is the Lenovo Case Study presented at the 2015 Supply Chain Insights Global Summit. Market Drivers.
The focus is on the role of supply chain finance in driving supply chain excellence. The design of the conference includes tours of several modern warehouses and centers of excellence. The data in Table 1 is from a recent research study. 5 A Focus on Functional Metrics Throws the Supply Chain Out of Balance. The takeaway?
To drive global scale, companies need to design the supply chain to buy globally and execute locally. The company leverages globally sourcing strategies to buy products at a lower cost and then deploys some unique process logic to drive mass customization for retailers. Performance on the Supply Chain Metrics That Matter.
Several customers addressed those questions in excellent case study presentations: Dr. Bernhard Herzog, Oxea GmbH – “Business Impact of a Supply Chain Operating Network”. BASF’s goals included: Automating the end-to-end Purchase-to-Pay process from purchase requisition to invoice. Fast and effective roll out.
While I could get two to five years of data from the Hackett studies done for CFO magazine, I did not have the ability to look across time, test it against macroeconomic factors and supply chain maturity. Companies cannot achieve supply chain excellence by working discrete projects in isolation. Ownership of Inventory as a Metric.
The study is primarily a comparison of best-of -breed solution providers (Logility, JDA, Kinaxis and OM Partners) versus SAP and Oracle. Unlike many research studies, it is a panel that is known. This is unlike many studies that are fielded to B2B panel groups where the identity of the respondents cannot be ascertained.).
Forty interviews and two quantitative studies helped me build the model in my mind. Demand latency is two-eight weeks delayed from consumption purchase to translate to an order. Organizations can align to drive value despite the allegiance to functional metrics. Sales and Operations Maturity Model from 2005-2008. Mistake #3.
This includes the automation of path-to-purchase for consumer products, active shaping of demand through price, channel incentives and promotions, eCouponing and mobile commerce for retail, and product proliferation for all. In the modeling, my recommendation is to look at the cost metrics in aggregate.
In studies from the periods of 2006-2008, there was slow adoption of 15-20%, and today, the supply chain leader prefers a cloud-based solution. Each year, we do a study–we term it the Voice of Supply Chain User – on user satisfaction with today’s systems. Figure 1 came from the 2012 study. (We The reason?
In Figure 1, I show results from a recent S&OP study. Older men buy less underwear than younger males and their packaging was not as attractive to the female shopper buying for the family. We established e-commerce tests, studied basket behavior and took the lessons learned to the bricks and mortar displays.
Executive, after executive, lament, “They have purchased many technologies and sponsored many projects to reduce inventories, but they are not seeing results.” ” I have been studying the evolution of inventory technologies as an industry analyst since 2002. This week, I published an in-depth analysis on the topic.
They have piloted the process in Excel and know that they need an enterprise level solution for a global roll-out of S&OP. The issue is that none of their IT investments in the last 10 years have moved the needle on operational metrics such as inventory levels, case fill rates, and other operational metrics. Their words.
AGCO was honored to receive the AME 2017 Excellence Award. AGCO envisioned employing a 3×3 training metrics: every operation would have 3 people able to execute it, and every person would be able to do 3 operations. We feel that the Agco case study has several important lessons for the supply chain transformational leader.
While traditional supply chain processes evolved from functional excellence definitions for source, make and deliver from the inside-out; to make the digital pivot and become more market-driven, companies need to define new supply chain processes outside-in. Study these pattern shifts daily and weekly. Bio-engineering? Customization?
For the past five years, the team at Supply Chain Insights identified Supply Chains to Admire Award Winners by analyzing performance by peer group on the key metrics of growth, operating margin, inventory turns and Return on Invested Capital (ROIC). The total cost of ownership analyzes the total costs of the buying decision.
In a much broader context, the byproduct of this work will be lasting innovation that informs design, production and distribution excellence for years. At the same time, start a frank discussion about which metrics matter right now. Perhaps purchase price variance and budget adherence should take a back seat to customer service.
While forecast accuracy, if used well, can reduce safety stock, what I find in the study of the global multi-national is the rise of cycle stock due to increased item complexity, and the increase of in transit inventories due to longer freight lanes and longer cycles in ocean transportation. This is no longer my belief.
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