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This requires a thorough readiness assessment, selection of appropriate technology, and careful integration with existing business processes. It is crucial to assess the organization’s technological infrastructure, supply chain processes, and compliance frameworks to ensure they are aligned with DPP requirements.
Despite two decades of advancement in supply chain technologies, companies are struggling to gain balance at the intersection of operating margin, inventory turns and case fulfillment. My goal is to understand the impact of technologies and processes. Today, we have a number of burning platforms. They are slow to adapt.
In the early 2020s, Microsoft’s transportation and logistics team needed to meet growing demand for cloud services while managing carbon, cost and cycle time. To achieve those results, “we had to massage the platform to accept emissions data from our carriers,” Mr. De Golia explained. But how could we know their emissions?”
This article explores how digital twins are being deployed in transportation, warehousing, and networkdesign. Static workflows based on outdated assumptions are no match for todays rapidly shifting inventory demands. Traditional planning tools often lack the agility to respond in real time.
The attendees were sitting on the edge of their seats to hear about the next release of Llamasoft software. The market for networkdesigntools was growing at a moderate rate, and most of the market had invested in technologies from either i2 Technologies (then termed i2 Strategist) or Logictools.
Over the last six years, we studied the connection between business results (growth, operating margin, inventory turns and Return on Invested Capital (ROIC)) and the link to company characteristics. A supply chain that produces products at the same cost, quality and customer service given the level of demand and supply volatility.
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.) Was this by design? A Case Study. My answer is no.
Forget static networkdesigns and gut-feel decisions. By harnessing the power of data science and analytics, you can gain end-to-end visibility across your entire network, breaking down information silos and optimizing every stage of your operations. That’s where data analytics comes in.
What follows are some key things a newcomer to the supply chain profession, or an interested reader of news headlines, needs to know about SCP technologies, processes, and roles. A networkdesign model figures out where factories and warehouses should be located. The key solution for this is networkdesign.
In particular, Ferguson’s supply chain is built for speed and to provide high service levels. Driving an excellent supply chain depends on how people are recruited and managed, processes, and the technology used. The company has shown sustained improvement on this metric. The company uses a networkdesigntool from Coupa.
Demand volatility is escalating, product portfolios are more complex, and supplier networks are harder to manage. ” The technology investments from the last decade are not meeting expectations. Use tools like networkdesign optimization and simulation modeling to help people model trade-offs.
Supply chain executives must evolve from cost and service as the key objectives for optimal demand-supply balancing towards the “quadfecta” of cost, service, resiliency, and sustainability. Metrics such as lead-times, forecast accuracy, inventory levels, and service are used to measure operational risks.
Inventories in the chemical industry are at record lows: a forerunner of bad days ahead. While we will recover quickly in retail (moving from painful shortages to a glut of inventory), the chemical industry–sitting four and five layers back in the supply chain–takes longer to recover. Each requires design and fine tuning.
Fred owned logistics and customer service for the organization. In the early 1980s, As a result, we did not have a perpetual inventory signal. Without a perpetual inventory signal, we were never synchronized on where to place customer orders. As a result, inventories ballooned after the DRP implementation.
I am speaking this morning at the Terra Technology conference and doing a book signing of my new book, Supply Chain Metrics That Matter. In parallel, I have been hard at work on a report on multi-tier inventory optimization for the last two weeks. Selling licenses does not translate into implemented software.
An efficient supply chain strategy is one that takes every aspect of your supply chain into account, from inventory management and warehouse design to freight tendering and transport optimisation. Inventory Management The key starting point is implementing proper ABC analysis, and you need to look at it from multiple angles.
As an analyst in the battered supply chain software market for a decade, it is fun to watch you grow. Clients buy your software because you make it real. I always start the discussion of all software acquisitions with the same statement: the acquisition of software is seldom a good deal for the buyer/user of software.
Confluence of New Technologies. In contrast, the digital supply chain transformation solves problems and defines opportunities based on the confluence of technologies shown in Figure 1. When we study 600 public companies by peer group, at the intersection of inventory turns and operating margin, only 5% drive improvement.
The increasing need for constantly analyzing these trade-offs across the supply chain networks has highlighted the need for digital twins and what-if capabilities in networkdesign solutions. This means continuously assessing the trade-off between the total cost to serve and meeting customer demand and minimizing lost sales.
Over the next five weeks, seventy business/technology and consulting leaders will complete the course. Based on the work with Georgia Tech, we are getting clear on which metrics matter by industry. As companies adopt a balanced scorecard, the functional metrics shift to a focus on reliability. Analyze inventory health.
However, AI’s inability to solve the very limited problem of ensuring that inventory is located in the right place in a warehouse suggests that planners don’t have to worry too much about job security. For fulfillment to be efficient, a warehouse needs the right inventory located in the right slots in a warehouse.
Year after year, well intentioned people toiled against improving metrics that reduced, not improved, the effectiveness of the supply chain. The argument that I want to make here is that the supply chain problem has changed, but we are implementing the same old technologies without stopping to realign against new goals. You got it!
This week, I will speak at Llamasoft’s conference on improving supply chain networkdesign. The gaps in our technologies are a barrier, but should not stop us from redesigning to improve performance. Service level is our most important metric. Reliability in both of these metrics is critical.
While most consultants and technologists want to sell technology, and are eager to slap in a new piece of software, my caution is to slow down and better understand root issues before having a technology discussion. When a company contacts me to help them with their supply chain, the pain is usually a gap in customer service.
When it comes to the management of inventory in value chains, frustration abounds. Executive, after executive, lament, “They have purchased many technologies and sponsored many projects to reduce inventories, but they are not seeing results.” Inventory is the culmination of many business decisions.
The combination of technology along with the advancements in transportation made it possible. The winners drive improvement while posting financial results in the Supply Chain Metrics That Matter ahead of the peer group. Inventory Turns. However, globalization comes with responsibility. Operating Margin.
For the purpose of this discussion, I define agility as the design of the supply chain to deliver the same cost, quality and customer service given a level of both market volatility and process variability. It requires design. Q: Is it only inventory disrupting the agility resulting from inaccurate forecasts by S&OP?
This document serves as a roadmap for professionals involved in supply chain networkdesign and optimization, providing valuable insights and practical guidance at every stage of the process. This initial step enables tailoring the supply chain networkdesign to meet specific needs effectively.
Last week, after booking an additional $1B in unexpected supplier costs in the third quarter, the CFO led the company’s focus on restructuring to “support efficient and reliable sourcing of components and internal development of key technologies and capabilities.” Multi-tier inventory management by itself was not sufficient.
The number one question that I am asked today by manufacturers across all industries is “How can I improve customer service?” Nine times out of ten improving customer service requires different management of the budget cycle and a rethinking of financial planning. Background. The supply chain is a complex non-linear system.
I asked myself, “How ironic is it that the technologies and processes of the past are always presented as the answer.” Tactical forecasting helps us to think through the questions of long-term asset strategies and sort through networkdesign optimization alternatives. Recognize that these are tactical processes.
In retail environments, IoT-enabled systems manage inventory levels and provide feedback about stock conditions, further enhancing the DPP’s accuracy. First, improving cybersecurity protocols is critical, with encryption technologies and secure communication methods helping to safeguard data integrity.
Interview with Lora Cecere, Founder and CEO of Supply Chain Insights and Author of Supply Chain Metrics that Matter ( published December 2014 ). She is the author of the enterprise software blog Supply Chain Shaman , which attracts 5,000 readers weekly. Metrics that Matter became a three year research project.
Active Work on Design and Modify. The use of networkdesigntechnologies, in combination with inventory optimization technologies, drives a higher level of satisfaction for the Center of Excellence. Networkdesigntechnologies are growing up and becoming part of enterprise architectures.
Active Work on Design and Modify. The use of networkdesigntechnologies, in combination with inventory optimization technologies, drives a higher level of satisfaction for the Center of Excellence. Networkdesigntechnologies are growing up and becoming part of enterprise architectures.
Intuitive Surgical, L’Oreal, and Sleep Number drove excellence through product and service innovation to outperform their peer groups. We are currently working with the statistics group at Georgia Tech to understand how the relationship of these metrics changed over time, but more on that in a later blog.)
Snow fell last night as I worked on my last Supply Chain Metrics That Matter report. The concept of the Effective Frontier is that best in class companies align functional metrics to balance growth, cost, inventory and Return on Invested Capital (ROIC) performance while balancing customer servicemetrics.
I knew nothing about the world of logistics, inventory management and order optimization. From the research, we know that when organizations have source, make and deliver reporting to the same leader, that supply chain performance improves (intersection of operating margin and inventory turns). The year was 1985.
However, this mature team found the technology insufficient. They gave lip service to the need for IT standardization, but ran their process on a custom built model that enabled reverse bill of material, and profitability analysis. Industries carried on average 32 days more inventory in 2020 than in 2007. (I Mistake #3.
Inventories in the chemical industry are at record lows: a forerunner of bad days ahead. While we will recover quickly in retail (moving from painful shortages to a glut of inventory), the chemical industry–sitting four and five layers back in the supply chain–takes longer to recover. Each requires design and fine tuning.
Inventories in the chemical industry are at record lows: a forerunner of bad days ahead. While we will recover quickly in retail (moving from painful shortages to a glut of inventory), the chemical industry–sitting four and five layers back in the supply chain–takes longer to recover. Each requires design and fine tuning.
If we look back at history, 70% of companies implemented Vendor Managed Inventory (VMI), however two-decades later only 1% of companies use VMI processes to drive a better demand signal. I worked for a software company for almost a decade and implemented demand management solutions in the 1990s for multiple companies.
In our research for the book Supply Chain Metrics That Matter , we find that this is the case for 90% of companies. While companies want to improve costs and inventory, most are going backwards. While many consultants will wave their hands and promise improvements in costs and inventory through projects, take pause.
A demand network translates demand across multiple parties. The focus is on channel data: price; inventory positions; and policies. As markets shift, a demand network enables a clear understanding of market positions with minimal latency. The use of advanced analytics enables the sensing of out-of-stocks. Channel Sensing.
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