6 metrics tips and tools to benchmark P2P Digital Transformation


Here’s a look at some of the Procure- to-Pay metrics procurement leaders should watch in order to better understand their digital progress. This metric closely aligns with digital transformation progress. This metric also impacts others like speed, visibility, and cost savings. . #2 Digital sourcing tools can help make this a more manageable metric. #3 Success in this metric also contributes to long-term vendor relationship management. #4

Rating Sustainability Performance: An Essential Business Metric


Read on for more details about EcoVadis ratings in this interview (first published on the ING Wholesale Banking site): Rating Sustainability Performance: An Essential Business Metric. Larger groups use EcoVadis Ratings as a global standard to align their sustainability performance across many subsidiary entities around the world (such as Toyota MHE and Belron ).

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Building a Triple A Supply Chain: Ten Tactics That Work

Supply Chain Shaman

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. The technology group wanted to implement SAP IBP, and the business leaders were resistant. So I asked, “Why would you want to automate a process when the groups are not aligned?”

Announcing the Supply Chains to Admire for 2019

Supply Chain Shaman

The source data for the analysis comes from Ycharts.). In the Supply Chains to Admire analysis, the focus is to understand the relative performance of a company within a peer group of growth, operating margin, inventory turns, and Return on Invested Capital (ROIC). (We We selected these metrics based on correlation work with Arizona State University in 2012. The Supply Chains to Admire analysis is a data-driven discovery by peer group.

Supply Chain Metrics: Make Sure They Are Aligned with Your Strategy!

Supply Chain View from the Field

Many people are talking about Key Performance Indicators, Metrics, Analytics, and other indicators of performance. The importance of selecting the right metrics or “measures” as I prefer to call them, is critical as we all know that metrics drive behaviors. Rather then selecting a plethora of meaningless metrics, it is always better to focus on a critical few, and select them wisely. Step 2 – Develop Metrics and Data Sources.

Measuring Up?

Supply Chain Shaman

The supply chain is a complex system with finite, and non-linear relationships between supply chain metrics that drive balance sheet results. We find that companies can improve one, but not two of the metrics. Teams struggle to drive improvement in both metrics at the same time. In our recent analysis of supply chains that are “working well” , we find higher performance when companies have source, make and deliver reporting to the supply chain organization.

Wanted: Supply Chain Architects!

Supply Chain Shaman

Much to my chagrin, when I entered into the world of supply chain, the processes of source, make and deliver were usually not designed. The focus in supply chain groups was not on how to design the operations so that they were more effective; instead it was about the use of best practices to maximize the value of what we had. Instead, I think that it needs to be holistic to balance the trade-offs of source, make and deliver together.

Manufacturing Gains From Machine Learning


Source: Smartening up with Artificial Intelligence (AI) – What’s in it for Germany and its Industrial Sector? (52 Source: Technology and Innovation for the Future of Production: Accelerating Value Creation (38 pp., Source: Digital Factories 2020: Shaping the future of manufacturing (48 pp., Source: Smartening up with Artificial Intelligence (AI) – What’s in it for Germany and its Industrial Sector? (52 PDF, no opt-in) 2017 Honeywell User’s Group.

SIG Webinar on Procurement Analytics and Innovative Data Leveraging

Supply Chain View from the Field

I will be leading a webinar with the Sourcing Interest Group next Nov. In particular, there is a noticeable gap between procurement executives’ explicit intentions of driving value for the business, and documented results as they pertain to improved engagement with internal business groups, ability to drive innovative analytical tools, and the resulting gap in alignment with business strategy. 12 at 2 PM, based on a study I have been working on with some folks at IBM.

What About Them Apples?

Supply Chain Shaman

” At the other end of the continuum is the argument that “ Forecast error is the most important metric to improve.” I have been an industry analyst covering the market– Gartner, AMR Research, Altimeter Group and my own company Supply Chain Insights– since 2001. Use The tactical planning horizon to make asset decisions, determine the best network design, design form and function of inventory, and establish sourcing strategies.

How Many Slaves Are in Your Supply Chain?

Talking Logistics

Coincidentally, at the Ariba LIVE 2013 conference yesterday, I attended a presentation by Justin Dillon, Founder and CEO of Made in a Free World , a nonprofit group that is “building a coalition of consumers, businesses, and governments to disrupt the system of slavery.” The group plans to publish the results of the talks in May.”.

Why Large Companies Increasingly Opt for 4PL Services

Logistics Bureau

Part of the Woolworths group, Primary Connect operates a vast national distribution network comprising road, rail, ocean transport services and, like many 4PL providers, makes use of 3PL storage facilities.

This Week in Logistics News (January 28 – February 1, 2019)

Talking Logistics

Robinson Reports 2018 Fourth Quarter and Full-Year Results TPG Capital to sell Transporeon Group to Hg BluJay Hires Andrew Kirkwood as Chief Executive Officer Tool Company Claims IPS Worldwide ‘Misappropriated’ Millions (WSJ – sub. req’d) How Blockchain Could Benefit Levi’s Worker Well-Being Initiative (Sourcing Journal) Companies Plan for Tariffs, More Paperwork in Case of ‘No-Deal’ Brexit (WSJ – sub.

A Diverse Supply Base Isn’t About Procurement…It’s A Leadership Issue!

Supply Chain View from the Field

The most important and common method for driving diversity objectives in the survey (in 73% of firms) involves explicitly building in diversity as an objective into sourcing processes. It is not uncommon to find that sourcing managers do not view diversity as a priority. An example of a metric captured in the form several key measures of commitment towards supplier diversity. I was recently involved in a survey of best practices in establishing a diverse supply base.

Post Award Contract Management with $40 Oil: Insights from Shell’s Kevin Fronk

Supply Chain View from the Field

Kevin and I worked together years ago to help define the a baseline framework for strategic sourcing and category management that was deployed within the Lubricants group, and which later became deployed across the entire Shell Procurement organization. This allows us to compare this rig’s cost versus others, and the cost of our fleet operating relative to other fleets on 10 different performance metrics.

Carter’s: A Story of Supply Chain Leadership

Supply Chain Shaman

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. In this role he supported the different businesses (12 in Europe and 11 in Asia) for all aspects of the Supply Chain; but Peter did not have direct Asia Sourcing/manufacturing accountability. Over the period of 2009-2015, only 88% of companies made improvement on the Supply Chain Metrics That Matter. (As

SCRC Student Project Lineup Off to a Great Start…

Supply Chain View from the Field

NC State kicked off classes last week, and as usual our incoming group of MBA students were lined up with projects as part of their entry class into supply chain management, MBA 541. In this context, relationships may exist between internal functional groups, as well as with suppliers and/or customers. These and other projects will surely lead to some interesting insights for this group of bright young minds!

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Supply Chains to Admire: 2016 Results

Supply Chain Shaman

The source data for the analysis is public reporting of balance sheets and income statements. To determine the winners, we compare the effectiveness of each company against relative performance within an industry-specific peer group. In the analysis, we divide companies into three groups: winners, finalists and under-performers. The winners of this analysis meet all of the criteria of improvement, value and performance when compared to a like industry peer group.

Getting Bangladesh’s Apparel Industry on the Map

Supply Chain Brain

In the past, it has been cobbled together from government licensing groups and brands’ supplier rosters. Illegal subcontracting at Rana Plaza resulted in many foreign brands losing faith in the country as a legitimate source of offshore production. In theory, factories should be eager to be identified as legitimate sources of production, as a means of securing more business.

A “Swiss Army Knife” of Supply Chain Talent Requirements: Views from a Former Wolfpack Student


He then went into global imports for the central purchasing group in Raleigh. Relationship management, data modeling, problem solving, sourcing analysis, negotiation, data-driven decision-making, metrics development, forecasting, process flow, BOM understanding, MRP/production schedule, Pareto analysis, and information presentations are all key skills that he applies in his CPO role.

Tell Me Why

Supply Chain Shaman

Traditionally, the focus has been on building efficient organizational silos for make, source or deliver. As a result, tor most companies, the goals are unclear and the financial metrics are not well-understood. It is a study of peer groups. They do not have a peer group for comparison. We do not include them in the analysis because there is no peer group comparison. This year-over-year comparison, enables visualization of performance on two metrics.

History Repeats Itself Without Supply Chain Leadership

Supply Chain Shaman

Despite goals to improve agility and resiliency, functional metrics for manufacturing efficiency continually throw the supply chain out of balance. The research, now in its sixth year, is an analysis of peer group performance and relative rate of improvement on four metrics (growth, operating margin, inventory turns, and Return on Invested Capital (ROIC)). The second step is to align metrics to the strategy.

Control Towers: If Only There Was A Clear Definition

Supply Chain Shaman

Groups throw-out concepts. 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. Groups rally around the concept of real-time. However, to use these data sources, we must break paradigms and focus on the use of non-relational techniques. Here I smile, and I hope that groups take pause.).

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BASF: A Story of a Supply Chain Leader

Supply Chain Shaman

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. The composite of metrics includes growth, operating margin, inventory turns and Return on Invested Capital.) While most companies make improvements in single metrics, pushing the whole portfolio forward is tougher.

Q&A on the Supply Chains to Admire

Supply Chain Shaman

It is the end of a two-year research project, and identifies which publicly held companies outperformed their peer group on balance sheet results. Here we share the answers to the questions that we get the most often about this research: What is the source of data? We built peer groups based on like industries. How did you define peer groups? The NAICS designation was developed by the US Federal Government to characterize groups of companies within an industry.

Overcoming obstacles to integrating finance with supply chain operations


IBP helps achieve key performance indicators (KPIs) like sales, customer satisfaction, inventory level and other metrics outlined in the strategic plan. Those benefits, as outlined by the Aberdeen Group , include: 55 day or less cash conversion cycle. Overcoming that challenge means developing meaningful and robust metrics that measure financial performance, and including them in S&OP operations. You end up with groups each going their own way.

Supply Chain Diagnostic: A Four-Step Process

Supply Chain Shaman

To accomplish this goal, I ask a cross-functional group to audit the past year. As a group, we drill into root issues. ” Or alternatively, “Is there data that could be sourced to help?” Many times useful data exists in marketing or sales groups, but is not shared with the supply chain team. The organization had a very strong digital team with great data, and the two groups were largely unaware of how they could work together.

Sorry, I’m Not Sure: Supply Chain and Logistics Predictions for 2018

Talking Logistics

Source: Evan, Flikr. “I SophiaTX Open Source Platform to Integrate SAP, Blockchain. If they actually follow through on their promise and oil prices continue to rise next year, how will transportation, inventory, and sourcing policy decisions change in response? And since so many aspects of supply chain management affect both customer experience and financial metrics, supply chain innovation efforts need to take these factors into consideration too.

The Fight of the Titans

Supply Chain Shaman

The field of supply chain management–combining source, make and deliver–into a common process started in 1982. Figure 1: Supply Chain Metrics Are a Balancing Act. The metrics shown in Figure 1 are difficult to improve together. Most companies improve singular metrics but are not able to drive portfolio. For this story, I have grouped like competitors together. An orbit chart is the linking of data across years at the intersection of two metrics.

Supply Chains to Admire – 2016 Results

Supply Chain Insights

The source data for the analysis is public reporting of balance sheets and income statements. To determine the winners, we compare the effectiveness of each company against relative performance within an industry-specific peer group. In the analysis, we divide companies into three groups: winners, finalists and under-performers. The winners of this analysis meet all of the criteria of improvement, value and performance when compared to a like industry peer group.

The Sensing + Intelligent + Social Supply Chain: Why do you need it?


However, organizations siloed in traditional functional work groups are actually impeding the flow of their own information across the network. The reality is, there’s never going to be one perfect answer that doesn’t involve some level of tradeoff across conflicting metrics and objectives. The result is a need for integration between modules, but also between companies with their own ERP systems and data sources.

Reduce Costs: Invest In Talent

Supply Chain Shaman

In manufacturing-based companies, 70-80% of costs are in the processes of source, make and deliver. While the practices of finance are over 200 years old, in contrast, supply chain as a cross-functional practice (the combination of make, source and deliver) was recently defined in 1982. We analyzed the impact of 150 factors on 493 financial metrics for the period of 2004-2016. So what are the characteristics of companies managing talent better than their peer group?

Get Your COV On….

Supply Chain Shaman

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. To make this journey requires the building of outside-in processes from the market and orchestrating the signal seamlessly across make, source and deliver. Wrong Metrics. …the weekend is just around the corner. Happy Valentine’s Day to all my blog readers.

2020 Requires Big Wings and Feet

Supply Chain Shaman

The discussions are with groups of executives—often ex-management consultants. No metric should be measured in isolation, and functional metrics should be replaced with the balanced scorecard metrics shown in Figure 2. To maximize value—price to tangible book, functional metrics need to be reset to focus on reliability. 5 A Focus on Functional Metrics Throws the Supply Chain Out of Balance. This share group is now in its sixth year.

Taking the Hill

Supply Chain Shaman

This week, at Supply Chain Insights LLC, we published our 11th report in the series titled Supply Chain Metrics That Matter. Financial ratios allow us to analyze performance across the peer group (large against small companies) and across currencies. We also look for companies that have out-performed their peer groups. When companies look at singular metrics (labor costs or inventory), they have moved backwards. Aligning metrics matters.