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Reason #9 Relentless pursuit of one supply chain metric at the expense of other metrics. Yet, these are similar instructions as what is passed down to the supply chain from executives focused on a specific supply chain metric. One example that I’ve seen several times is around inventory targets. These are many and varied.
For years, supply chains were engineered to be lean. Lean models alone are no longer sufficient. For example, AI-enabled systems can monitor global trade activity, policy changes, and even weather patterns to flag emerging risks before they impact operations. Metrics must reflect the new priorities.
What is Lean Retail? In his book, Lean Retail & Wholesale , professor and author Paul Myerson defines the shift towards lean retail as “a dramatic change in the way products are ordered and distributed that is far more data-centric and focused on understanding and meeting customer demand.” Why is lean retail so important?
We’ll examine the key components of efficient supply chains, explore essential performance metrics, and uncover the fundamental drivers that influence efficiency. You can also use lean manufacturing principles or just-in-time production to reduce waste and improve productivity.
In this final blog on agility and why you should consider becoming an agilist to survive the new completion (of the continuous mention) of the application of enterprise decision management systems (EDMS) from Taylor and Raden cited in the first blog, I turn to the metric of agility and a new ROI metric of decision yield. The Takeaway.
Today I will discuss how a company can sustain a lean culture once they have implemented lean practices in order to achieve continuous improvement. Your company has started the lean journey, but how do you sustain it? How can we Continuously Improve Daily and Sustain a Lean Culture and Behavior? Why are we doing this?
Lean is a new way of doing business. For shippers, culture and behavior have to change to apply Lean Transportation thinking. Lean thinking focuses on the elimination of all waste (where waste is defined as any non-value added process) and bringing value to the customer , beyond the customer’s expectations.
Previous commentaries on Value Unchained noted a recent University of Tennessee research study, “Green, Lean and Global Supply Chain Strategies.” In the posting, Beyond the Research Part Three: Green and Lean Global Supply Chain Strategies , the researchers at the University of Tennessee made a rather important observation.
3 Key Metrics for Measuring Supply Chain Performance Beyond Cost Reduction. 10 Soft Metric Considerations in Measuring Supply Chain Performance. Twitter Google+ LinkedIn The post 3 Core Metrics & 10 Soft Metrics for Measuring Supply Chain Performance appeared first on Transportation Management Company | Cerasis.
In the below is a real world example of a consultant coming to a third party logistics company with the goal of choosing a warehouse and 3pl provider. Customer metrics. Lean IS their DAILY work. Lean IS their DAILY work. Quality: Does customer/shipper want Lean Six Sigma Quality or Accepted Quality Levels (AQL)?
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.
Management practices such as lean manufacturing and just-in-time inventory management, along with globalization, have made tremendous impact on cost and service, but have accentuated risk. The bullwhip effect is one example of this disruptive effect, when small changes in demand cause huge demand spikes downstream.
How are companies rethinking their liquidity management strategies in response to the recent degradation across major working capital metrics? In the wake of economic uncertainty, many companies have experienced a degradation in key working capital metrics.
Top management knows that lean can add value , but many still haven’t moved past the initial education stage into full-scale lean supply chain implementation. One reason may be that they haven’t made the paradigm shift as to how to implement lean. These metrics should be reviewed frequently to ensure supply chain success.
For example, a student might work on a project that involves analyzing sales data to predict future product demand, thereby learning how to adjust procurement strategies accordingly. Similarly, performance metrics courses can guide learners in establishing key performance indicators (KPIs) to monitor and improve supply chain efficiency.
Maybe, but what is certainly clear from the examples is that the complexity of modern supply chains requires better visibility into every phase of production and distribution. Every company today runs on data – the key to using your data is choosing the right metrics for visibility into your supply chain. Operational Excellence.
A proof of concept (POC) is an increasingly common method to select the best supply chain software vendor for your company, yet many supply chain practitioners still lean on the traditional RFI (request for information) tool. 6 Focus on the wrong metric. RFIs also assume the organization is focusing on the right metrics.
Editor’s Note: This is the first in a three-part series on Supplier Quality Management processes and how to evaluate your suppliers from Chuck Intrieri of The Lean Supply Chain. 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.
Some supply chain companies are leaning on the power of analytics to help streamline their processes and get ahead of their competitors. for example, used predictive analytics to make changes in their inventory processes and have since seen an increase in their production and purchase orders. Hanesbrand Inc. , writes Melissa R.
Lean manufacturing involves 13 core principles – many more than the ‘five principles’ that are often associated with this popular manufacturing system. The lean concept originally came from manufacturing, but it has gained in popularity and is now used widely across different industries and sectors.
We conclude our series on supplier quality management (SQM) today with a look at some case studies and examples of benefits derived from the application of a supplier quality management system. Examples and Case Studies from the Implementation of a Supplier Quality Management System.
A KPI is a practical and objective measurement of progress, either: Towards a predetermined goal, or Against a required standard of performance It might help to think of a KPI as something like an instrument on a car dashboarda speedometer, for example. Why Are KPIs Important?
Fine paper is an example of an industry whose total addressable market has been shrinking for decades and looks set to continue (see figure). Rather than cutting back, our customer Mohawk Industries decided to lean in. Therefore, traditional push-driven supply chains are wholly unfit for this situation.
Lean logistics is a strategy designed to optimise supply chain efficiency by cutting out waste and maximising customer value. In this guide to lean logistics: What is lean logistics? This approach to supply chain management is a child of Lean Thinking – a business methodology that originated in Japan in the late 1980s.
The winners drive improvement while posting financial results in the Supply Chain Metrics That Matter ahead of the peer group. For example, P&G is often touted as a supply chain leader. A Supply Chain Leader will make progress on both of these key metrics with a very tight and controlled pattern. The reason?
Just as in the following five examples that reveal interesting data related to the trucking industry. Transportation Metrics That Matter Most to Track and Improve Performance : How do you measure logistics efficiency and transportation metrics performance indicators when you are already doing the best job possible?
When we look at the organizations of today, words like efficiency and productivity get thrown around with little understanding of what is required to improve one of these measurements (metrics). For example, if you produce 1,000 units one week and 1,100 units the next, you are more productive the second week.” Efficient Productivity.
Some KPIs (to be stated in percentages or numbers) that should be part of your SLA are:Customer Service, Inventory Integrity via Cycle Counting, Continuos Improvement (using LEAN initiatives, Process Improvements, etc), Shipment time from the 3PL to your customers, VOC (Voice of the Customer) feedback to insure that your customers are happy with the (..)
In this guide we walk through the essential steps to design a layout, implement labeling and slotting strategies, manage inventory with lean principles, and adopt technology solutions that keep operations agile. Balance lean inventory with resilience to supply chain disruptions.
Examples of firm overhead: The cost of keeping your equipment running (maintenance, water, electricity, etc.). For example, you may identify that you could trim direct materials costs by substituting a high-cost material or supplier for a more affordable one that does the job just as well. Equipment depreciation.
How many people make a New Year’s resolution to “Lean” yourself out only to abandon it shortly thereafter? What do you do when your Lean program at work suffers the same fate? In this case one of the areas I wanted to understand was whether or not there was a Lean program in operation. And it needed a reboot.
Introduction Gardner, (1954) and Huntzinger, (2007) define Purchase price variance (PPV) as a metric used to measure the effectiveness of cost-saving efforts by calculating the difference between the planned cost (standard pricing) allocated for purchasing activities and the actual cost incurred. per unit, reducing the actual cost to $90,000.
Weve even included some examples of these KPIs using pre-built views for inventory reporting from our Stratum business intelligence solution. Available to Promise (ATP) Available to Promise (ATP) is a real-time inventory management metric that tells you how much of a product you can promise to customers without overcommitting.
Strategies around lean replenishment and logistics must be deployed to accomplish performance goals, many of which may be required to remain in good standing. Identification and measurement of key trending metrics on a weekly or monthly basis, with an emphasis on corrective action planning to address metrics that don’t meet goals.
Here explain what DSI is, how to use it, and why it’s crucial to track this metric in your business – whether you’re a retailer, manufacturer, wholesaler or distributor. The next figure you need to calculate is COGS, which is a metric that relates to the direct costs of a product that a business sells.
In the Supply Chain Metrics that Matter table, we can clearly see that “operating margin” and “inventory turns” matter to public financial performance. Each faces four years of deterioration on this important supply chain metric. Companies have been on Lean journey. Why it Matters. It is about flow.
JIT is a comprehensive philosophy designed to reduce defects, improve quality, and increase customer satisfaction, supported by practices like minimizing inventory to be as “lean” as possible. For example, they reduced inventory planned for first quarter 2022 by $120M due to more accurate estimates of levels needed. on-time delivery).
For example, to ship goods from China to the U.S. To create a lean supply chain with the minimum lead time you need to apply lean thinking. Simple lean supply chain techniques such as pull and leveling cost very little to implement and can have a big impact on lead times. In most cases geography is not the problem.
As a result, tor most companies, the goals are unclear and the financial metrics are not well-understood. This year-over-year comparison, enables visualization of performance on two metrics. In addition, they rank last in their ability to drive metrics improvement. Metric balance is difficult for supply chain teams.
For example, with Logility GenAI your data is safeguarded with advanced encryption protocols and robust access controls to ensure your sensitive information remains confidential and protected. For example, suppose an order for a key customer is going to be late. Generative AI absolutely can be built with measures to safeguard privacy.
I will lean on the Supply Chain Planning space as an example and relate to the broader shifts in the role of IT in supply chain management. As I was reading the book, I couldn’t help but reflect on my own experience of working with IT organizations over the last two decades I have been in the supply chain business.
Procurement technology helps lean teams scale efficiently so they can manage more spend, suppliers, and categories effectively, and still maintain control. For example, thanks to Ivalua’s AI-powered procurement platform , organizations can route requests, apply policy rules, and validate vendor data automatically.
Over the period of 2009-2015 only 88% of companies made improvement on the “Supply Chain Metrics That Matter.” (The The Supply Chain Metrics That Matter are a portfolio of metrics which correlate to higher market capitalization.
For example, Wrike’s platform offers tools that help production teams align on priorities, track deadlines, and identify potential bottlenecks before they escalate. For example, if a machine goes offline, the team can reroute work before delays affect downstream tasks. Such insights make production more predictable and resilient.
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