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To build an outside-in model, and use new forms of analytics, we must start the discussion with the question of, “what drives value?” ” Traditional planning models optimize functional processes to improve cost and customer service. You are right. The answer is not th e Gartner Top 25.
AI in supply chain automation is gradually reshaping how core functions operate, particularly in procurement, warehousing, and logistics. Key Insight: The use of AI in supply chain automation is producing tangible benefits across procurement, warehousing, and logistics.
While SAP has had procurementanalytics solutions, last year at Spend Connect Live, SAP announced the Spend Control Tower. The Warner Music Group was an early adopter. Daniel Chapman, the senior director of process transformation for procure to pay at Warner Music, was a keynote speaker. It is a brilliant tool.”
In follow-up qualitative interviews, one of the largest issues with organizational alignment was metric definition and a clear definition of supply chain excellence. In my post Mea Culpa, I reference my work with the Gartner Supply Chain Hierarchy of Metrics. Error is error, but is it the most important metric? My answer is no.
Most of the business networks were hollowed out by venture capitalists or purchased by opportunists. ” My problem is that we move through these hype cycles with little accountability for spending and with a major opportunity cost to not redefine work. Or that a focus on cost reduction can actually undermine value creation?)
Reason #6 Not effectively managing inventory. Reason #9 Relentless pursuit of one supply chain metric at the expense of other metrics. Imagine that your child brings home their report card and it’s a mix of good and fair grades. One example that I’ve seen several times is around inventory targets.
It is crucial for organizations to understand the importance of Purchase Order collaboration to effectively manage their direct spend, optimize operations, and mitigate risks. From natural disasters to geopolitical tensions and the ongoing COVID-19 pandemic, supply chains have been significantly impacted.
Picture this: You’re a warehouse manager, and with a few taps on your smartphone, you instantly know the exact location and quantity of every item in your inventory. That’s not science fiction—it’s the power of mobile inventory management. Ready to turn your inventory from a headache into a strategic asset?
Supply shortages resulting in empty shelves or parking lots of WIP inventory represent a spectre causing supply chain leaders to reconsider supply chain inventory practices. Opinion of just-in-time (JIT) as a practice has taken a battering and inventory is rising. Is supply chain inventory the problem?
Wikipedia In 2014, I was exploring methods to publish what is now the Supply Chains To Admire report. The use of orbit charts allowed me to see the patterns of performance at the intersection of metrics over time. By charting the performance against peer groups, I could see the story. We purchase data from Y charts. (A
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.) Understanding this relationship requires modeling. (A
In a previous post , I made a case for how the Chief Supply Chain Officer (CSCO) and Chief Procurement Officer (CPO) are smarter together. Accordingly Supply Chain and Procurement will need continuous collaboration. By aligning supply chain and procurement, spend can be considered more holistically.
These steps include sourcing and receiving inventory, storing inventory, order processing, picking and packing an order, shipping the order, and returns management. Standard sizes and categorizations play a crucial role in determining the costs associated with shipping products that meet standard criteria in fulfillment centers.
As an old gal, with over forty-years of supply chain experience, writing this report for ten years taught me many lessons. I find in the orbit chart analysis that 45% of companies in the report are unconsciously incompetent. They are unconscious that they are underperforming their peer group and have not driven industry improvement.
GEP and the North Carolina State University (NCSU) Supply Chain Resource Cooperative surveyed supply chain, procurement and IT professionals across a range of industries to gain insight into their priorities and strategies regarding supply chain resilience and optimization. Alex Zhong, Director Product Marketing at GEP.
The idea is that data points within a group share similar properties, and each group is different (statistically speaking) from another. There is so much data, and to make use of it, we need to use data mining and analytics to drive meaningful insights that can be put to some good use. The retail industry is rich with data.
In May 2025, one in seven home-purchase agreements fell through resulting in the cancellation of 56,000 purchase contracts. Instead, the alignment between operations and commercial groups grew three-fold. Ask a procurement or transportation professional if they have a good demand signal and expect a laugh.
Small companies may also lack the resources to create a dedicated procurement team for proper sourcing and supplier vetting. Grouppurchasing organizations can be the perfect way for these companies to increase cost savings. Keep reading to learn: What is a grouppurchasing organization?
I know that your primary focus is procurement. If S&OP efforts were that effective, don’t you think that we would have made more progress against inventory levels, margin, and growth? In part, this results in increasing swings in inventory in response to shifts in consumer demand as one moves further up the supply chain.
Groupthink is a psychological phenomenon that occurs within a group of people in which there is a desire for harmony within the group, but the result is an irrational or dysfunctional outcome. I feel that the industry is engaged in ‘Group Think’ No one in this meetings is going to ask tough questions.
PwC reports that almost half of assets under management are held by investment firms committed to decarbonization. Similarly, UPS has strong commitments to sustainability and invests in many options, such as alternative fuel vehicles, e-cycles in dense cities, and carbon offsets for purchase with shipping.
I am currently doing research on inventory management. In the research, I ask inventory planners to define resilience. Of the twenty companies interviewed, only one can answer the question, “Do you have a good inventory plan?” No technology in the market measures inventory health. Today, this is not the case.
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. Orbit Chart for L’Oréal at the Intersection of Inventory Turns and Operating Margin.
Shoppers coping with inflation have shifted buying habits , purchasing fewer goods and cutting back on big name brands in favor of cheaper alternatives. Behind the scenes, CPG brands are strategically balancing cost cutting measures with supply chain investments to ensure preparedness for continuing market shifts.
Analytical techniques like linear programming can create the mathematically “optimal” plan, but these methods must be implemented well to avoid creating other challenges. Fusing analytical approaches improves the math behind optimization, but to avoid highly-efficient silos it should be paired with concurrent planning.
Definition: Category management is a systematic way to organize and supervise groups of products or services within a company. Businesses often use it in retail and purchasing. In category management, you sort items with similar characteristics and treat each group as a separate unit.
His organization purchased an advanced planning technology from well-known best of breed provider, and the implementation should have been successful, but it was not. As a result, demand planning is largely manual, inventory management is a series of manual inputs, and production planning is via spreadsheet.
In today’s dynamic market, procurement is far more than just a buying and purchasing center. Our latest e-book, “ Is Manufacturing Missing Out On Procurement’s Value Add? Our latest e-book, “ Is Manufacturing Missing Out On Procurement’s Value Add? Here are some key insights from the e-book.
I think about this discussion with Keith often as I work on the Supply Chain Index and edit the chapters of Metrics That Matter. In Figure 1, I share a composite orbit chart of progress of Cisco Systems, Intel, Samsung and Flextronics on the Effective Frontier at the intersection of inventory turns and operating margin for 2006-2012.
Most have a supply organization that has a sub-group that is chartered with forecasting demand for use by supply. In contrast, the demand organization that I am advocating is an analyticsgroup that crosses over sales and marketing into supply. 2) Invest in New Forms of Analytics. Treat demand latency as the evil empire.
I wrote my first report on Sales and Operations Planning (S&OP) while sitting on the floor in the Atlanta airport in 2005 when I was an AMR Research analyst. I wrote many reports on airport floors in those days–electrical plugs were just too scarce.) Sales and Operations Maturity Model from 2005-2008. Mistake #3.
In todays fast paced industrial world, inventory mismanagement poses substantial financial risks. With approximately $30 trillion of trade flowing from node to node, inventory rebalancing or mismanagement contributes to two major and often preventable issues: lost uptime, and lost sales. The Solution: ThroughPut.AI
Within this setup, an ERP procurement module helps companies make purchases and manage suppliers. Numbers speak louder: According to Procurement Tactics’ top procurement trends in 2025 , 83% of CPOs prioritize digitization. Keep reading to learn: What Is ERP in Procurement?
According to PLS Logistics , global companies will install procurement managers in China for entire organizations by 2025. There was a time when buying a computer was considered a once-in-a-decade purchase, if not once-in-a-lifetime. Globalization Will Become More Important in Everyday Decisions.
Retail returns occur when a customer returns the purchased items to a seller in exchange for a refund, store credit, or a similar product. Returns come with plenty of challenges around logistics, inventory, and predicting volatile sales trends. It’s true that returns cost retailers money.
In this scenario, by adopting an adaptive supply chain, the retailer uses real-time data analytics to identify emerging trends and collaborate closely with suppliers to quickly adjust production and inventory levels to meet customer demand. This collaboration enables faster response times and cost savings.
ARC Advisory Group did a study on the supply chain collaboration network (SCCN) a couple of years ago. The company’s customers report that the ETAs provided by these FourKites are more accurate, timely and easier to access than those provided by carriers. That is fast growth. Today, FourKites can track order visibility.
Rising costs, supply chain chaos, and economic swings put businesses under enormous pressure to protect their margins. According to McKinsey & Company, procurement accounts for 50% to 80% of a company’s cost base. That’s why organizations zero in on strategies to achieve procurementcost reduction.
NPD Groupreports that Millennials spent 81 percent of their shopping dollars in brick and mortar stores, and only 19 percent online. This emerging adult population, often referred to as the Gen Y, are the largest group to have grown up in an age of consumerism. They are known to have a sense of entitlement and big expectations.
Planalytics’ weather-driven demand analytics help businesses stay ahead of never-ending sales variability. Logility customers can leverage Planalytics weather-driven demand analytics to factor in the weather’s influence on top line revenue and product/category sales across specific time periods and locations. ATLANTA – Jan.
following the reporting of fourth-quarter results. This is despite the strengths of the recent purchase of Optimity. Note the lack of resilience of Eastman through the pandemic and the negative shift in operating margin and inventory turns since 2018. In short, there is no substitute for visionary leadership.
Featuring Our 12 Best Procurement Articles! Procurement operations are the backbone of every company’s supply chain. Fundamental to procurement is the acquisition of goods and services from a party that’s further up the supply chain. This document is the first legal contract in the operational procurement process.
Gartner purchased the firm in 2010.) My desire was to make the rankings of the Top 25 supply chain report data-driven based on balance sheet results. Companies entered the pandemic with twenty more days of inventory than at the beginning of the great recession. AMR Research was an industry analyst firm in Boston. Reflection.
However, two decades later, there is still no technology solution to enable demand visibility or help companies use channel data to translate demand into an inventory, replenishment, or manufacturing strategy. The decline in inventory turns uses cash. My question is, “Why?” Background. Growth requires cash.
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