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In follow-up qualitative interviews, one of the largest issues with organizational alignment was metric definition and a clear definition of supply chain excellence. For example, a cost improvement in one function could raise the costs in another. Error is error, but is it the most important metric? What Drives Value?
For example, integrating renewable energy into supply chains can reduce environmental footprints while enhancing brand equity, demonstrating a commitment to sustainable operations. Public Reporting: Publishing sustainability reports and ethical compliance metrics to highlight progress and areas of improvement.
Patagonia serves as an excellent example of this approach, incorporating recycled materials into its products and offering repair services to minimize waste while maintaining a strong brand commitment to sustainability. Measuring Progress and Building Trust Transparency is essential in sustainability efforts.
For example, you cannot control governmental policy. I give these three scenarios as examples. Form and socialize your own hierarchy of metrics. For example, don’t focus on forecast error. Here is the metrics framework that I am using at present in my outside-in classes. You may not agree with me.
Just by embedding analytics, application owners can charge 24% more for their product. How much value could you add? This framework explains how application enhancements can extend your product offerings. Brought to you by Logi Analytics.
Use of Supply Chain Descriptors Most organizations are locked into functional silos driven by functional metrics. Stuck in a rut, supply chain leaders try to punch their way through a set of conflicting metrics and priorities each day. The metrics defining success in manufacturing and procurement do not align.
Not all the transactional data, just the data required to calculate a metric or make a decision. The platform has thresholds that say, for example, “If the dollar value of orders changes a little, that doesn’t matter. So, we deploy an agent on an SAP environment. The agent selectively pushes data to the Aera data model.”
In this guide, we’ll explore what cost efficiency is, examples, and best practices on how cost efficiency can make your company more competitive and profitable in today's fast-paced economy. Example of cost efficiency A TechRepair Company operates two service plans: Plan A costs $6,000 monthly and services 1,200 devices.
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.
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. AI is helping companies better detect risk, model alternatives, and make faster decisions with more confidence.
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). A focus on functional metrics throws the supply chain out of balance.) Most are just that words.
At each company, there is a relationship between the metrics of growth, margin, inventory, customer service, and asset strategy. For the purpose of this article, I will use Return on Invested Capital (ROIC) as the proxy metric to discuss asset utilization.) Let’s take P&G as an example. A Case Study. My learning?
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. Let me give you example. Reward teams for cross-functional metrics.
Let me make my point by sharing some financial data using client examples from the last decade. An example for this client would be to use 2017 and 2018 history to forecast 2019. Use data and new metrics systems to free the organization from the ball and chain of corporate politics. Days of Inventory Comparison.
Watermelon Metrics Don’t Drive The Right Results. I love the metaphor of watermelon metrics. In most organizations, there is a dashboard of functional metrics that shows all of the functions operating in the “Green” or acceptable levels until it comes to customer service. What are functional metrics?
We’ll examine the key components of efficient supply chains, explore essential performance metrics, and uncover the fundamental drivers that influence efficiency. Efficient supply chains strengthen collaborative relationships through automated communication systems and shared performance metrics.
What Celanese has accomplished is the single best example ARC is aware of employing agentic AI and copilots at scale. They prepare equipment for maintenance, do isolation (disconnect a piece of equipment from the flow of chemicals by closing valves), look at quality or reliability metrics, and do rounds. Celanese is an exception.
For example, consider the challenges in the automotive industry that stem from the supply chain issue in chip manufacturing. Tracking the Metrics that Matter. While Ardent expects Procurement to rise to and tackle these challenges, tracking the metrics that matter will help them stay focused for full recovery. Inflation Metrics.
A disruption at any point in the global logistics network including the average of 12 touch points from shipment packaging to final delivery can prove disastrous for profits, service levels, customer loyalty, and other key metrics. With the global e-commerce market predicted to reach $8.1
The use of orbit charts allowed me to see the patterns of performance at the intersection of metrics over time. As an aside, I do not think that Lenovo is an example of a supply chain excellence. Fortuitously, I hired a bright summer intern named Alex that introduced me to orbit charts. Consider Lenovo in Figure 1.
For example, the goal is not track truck location, but to provide insights on location in context with a delivery appointment. For example, will the truck be late to arrive against a pre-established appointment. The focus is on functional metrics, but are unable to get to overall supply chain metrics. 2) Latency.
Despite legislation, in 2022, the world generated 62 million metric tons of e-waste, according to the United Nations Global E-waste Monitor. million 40-metric-ton trucks which, if placed bumper-to-bumper, would form a line long enough to wrap around the equator. The apparel industry is a prime example.
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.
For example, in Figure A, we share on orbit chart on how Sanofi is underperforming the industry. For example, while the University of Tennessee features the story of Mondelez as a journey in supply chain excellence, and features Daniel Myers, past Supply Chain Leader, as a lecturer, I do not see Mondelez as a Supply Chain to Admire.
In this post, we’ll look at the third pillar, competition and offer a couple real world examples of its use in the warehouse and DC environment. Leaderboards on any manner of metric are an easy example of competitive gamification. Leaderboards on any manner of metric are an easy example of competitive gamification.
How aligned do you believe your organization is to drive these metrics? For example, in the research, I found maturity in Cadbury, DuPont, and Gilette processes. The work on the correlation of supply chain metrics to Market Capitalization demonstrates the importance of the management of margin (not costs) against inventory turns.
For example, Lennox Residential , a leading HVAC systems provider, leverages advanced ML algorithms and cluster analysis to identify and track seasonality patterns across its diverse product line. However, todays business environment often involves complex, overlapping seasonal patterns affected by multiple variables.
The Rule of 40 was popularized by venture capitalists in recent years as a key performance metric for SaaS firms. The metric captures the trade-off between short-term viability and the investment in growth. on this metric. At Coupa, for example, non-GAAP revenues were 102% of revenues in fiscal year 2016, but only 62% last year.
In this guide, we’ll unpack the essential functions every ecommerce warehouse must master, along with best practices, real-world examples, and technology tips to help. For example, adding additional warehouse associates during the holidays can have a positive impact on fulfillment speeds. What are warehouse functions?
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?
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.
As regulations across the globe strengthen, the pressure to collect, report, and organize emission-related metrics has never been higher. Across the globe, requirements for stricter reporting on complex metrics are increasing.
We talk about the move from functional metrics to a balanced scorecard, but we don’t use a balanced scorecard as an objective function. For example, let’s take a look at the patterns of Anheuser Busch, Colgate-Palmolive, Mondelez, and Nestle shown in Figure 1.
One of my stark realizations this year is that smaller companies are beating larger and often more established companies on growth metrics, inventory turns, operating margin, and Return on Invested Capital (ROIC). (In The metrics selection resulted from work with Arizona State University in 2013.) Look for the full report next week.).
For example, one of the key decisions that a manufacturer needs to make is should they continue to buy goods from one of their suppliers. For example, are you still a minority owned company? For example, Dun & Bradstreet (D&B) publishes reports on the creditworthiness of companies.
This example illustrates why supply chain visibility isn’t enough. And the linked nature of supply chains mean that collaboration is necessary to ensure that a solution to a problem doesn’t meet the metrics for one link but negatively impact another. Why transparency is better than visibility.
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.
Track KPIs, Not Buzzwords Evaluate V2X based on tangible logistics metrics: fuel savings, delivery times, accident rates, and emissions. V2X is not simply a standalone tool, it is the connector for IoT infrastructure that drives informed decision-making. Focus on what drives profit and safety, not just innovation.
The latter refers to a single variable standard (SVS), by which one metric, such as cases per hour, is expected to tell all. What’s more, because an SVS approach only accounts for one metric at a time, a host of other equally if not more important metrics are bypassed, leaving you largely in the dark. Ad infinitum.
For example, real-time planning, end-to-end planning, control tower, integrated business planning (IBP), and digital brain are oxymorons while discussions on innovation bounded by a required ROI is a juxtaposition. Integrating data does not align an organization motivated by functional metrics. I don’t think so. Digital Brain.
Aligned Metrics. To ensure the management of the complex system, the metrics of operating margin, inventory turns, ROIC, customer service, revenue, and forecast accuracy need to be managed together as a non-linear system. Take General Mills and Kellogg an example. Supply Chain Design.
If you don’t, you risk choosing the wrong distributor partner and, for example, the market entry fails to meet expectations. Internal Perspective: Performance Monitoring: KPIs and Metrics: Establish key performance indicators (KPIs) to monitor distributor performance.
For example, in some instances simply adjusting delivery windows can save more than you can through rate negotiations. Performance Management Having just three key metrics at each organisational level is a good idea for performance management in logistics.
Because of service disruptions – not being able to buy toilet paper, for example – the supply chain has been more discussed than ever before. They can then use the data to provide an apples-to-apples benchmark on a variety of innovative supply chain metrics applicable to the grocery supply chain. But just how bad was it?
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