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Enterprise procurement teams face growing pressure to deliver strategic value – managing supplier risk, ensuring compliance, and supporting sustainability – all without sacrificing speed or control. This blog explores the most common challenges in digital procurement and the capabilities that matter most.
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.
ZF transforms those purchased products into over 2,000 products. MSCN solutions provide supply chain visibility, network-based applications, and network analytics. The Transition from Lean to Resilience. No industry has been more committed to lean practices than the auto industry.
Supply chain efficiency is the cornerstone of success and involves the effective management of processes, resources, and technologies from procurement to production, transportation to warehousing. In the automotive sector, manufacturers are simultaneously reducing inventory costs and delivery times.
In May 2025, one in seven home-purchase agreements fell through resulting in the cancellation of 56,000 purchase contracts. Supply chain was defined in 1982 as interoperability between source, make and deliver. Ask a procurement or transportation professional if they have a good demand signal and expect a laugh.
Understanding how your Procurement and Supply Chain KPIs are performing isn’t just a nice-to-have; it’s essential for survival and growth. Is inventory bloating your costs? Why You Need Visibility of Supply Chain and Procurement KPIs? Running procurement and supply chain without metrics is like driving blindfolded.
From artificial intelligence to refocusing on procurement, the state of supply chain continued to explode throughout 2016, and you need to understand why. A 2016 Accenture survey, reports RF Gen , explained how more companies are taking advantage of AI benefits through linked supply chains. Agile = The New Lean.
What Contractors Need to Streamline Procurement in 2025 By Ian Summers (pictured) Content Writer 111 Views You’re on-site before dawn, the framing crew’s ready, but the steel shipment’s stuck in limbo, the invoice isn’t approved, and your project management app just pinged you for the fourth time.
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. Right Service.
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?
Sure, supply chain cost reduction is important in reducing the cost of goods sold (COGS) and increasing profit, but there are other measurements which should not be forgotten. 3 Key Metrics for Measuring Supply Chain Performance Beyond Cost Reduction. 10 Soft Metric Considerations in Measuring Supply Chain Performance.
While lean manufacturing and just-in-time were game-changing concepts when they were introduced, agility and resilience must be taken to an entirely new level post pandemic. In a study of logistics providers conducted by Fraunhofer IML, only 36% of organizations reported that they had a clear overall plan for digital transformation.
Organisations that have successfully implemented RPA initiatives reportcost savings of up to 80% and time savings of up to a staggering 40%. Procurement. Procurement can also have RPA do dynamic searches of websites to source or conduct market research for future buys and tenders. Purchase Order Management.
It is critical to monitor inventory effectiveness using five key metrics: Expedited orders, inventory turns, obsolete inventory, safety stock and stockouts. Whether you measure purchase orders or customer orders—and you should do both—high numbers indicate problems in your inventory planning and flow.
Data-Driven Decision Making : Using analytics to continuously refine operations. Key Benefits and Business Impact Warehouse optimization offers significant advantages across multiple areas: Cost Reduction: Expect a decrease in operational expenses, lower labor costs, and reduced energy consumption.
A slight change within a function–in sourcing or manufacturing, or along the chain–can greatly impact the outcomes of cost, customer service, or working capital. Let’s take a closer look at sourcing. The inadequacies of MRP is the genesis of the lean process of Plan for Every Part (PFEP).
Forecasting Cost : Food, fashion, and retail all have seasonal turnover. In order to avoid excess inventory and keep your business lean, you must understand the pace of movement of each product. Overhead Cost : Warehouse Management Systems are expensive, and so are inventory managers. Source: [link]. Visuals help.
In their time lean manufacturing and just-in-time were game-changing concepts. Sudden demand spikes, precipitous demand drops, supply disruptions, production line shutdowns and other events can only be managed by early prediction and real-time responsiveness. In 2021 it is an entirely new game.
Striking the perfect balance between available stock and cost efficiency is key. By leveraging analytics and key performance indicators (KPIs), manufacturers can optimize inventory, reduce waste, and boost profitability. Get it wrong, and you risk financial strain and fulfillment headaches. Why is GMROI important?
Luckily, supply chain analytics is here to help! By harnessing the power of data and analytics, companies can uncover valuable insights into their supply chain processes, pinpoint areas in need of improvement, and make informed decisions that can boost their bottom line. Key Takeaways What is Supply Chain Analytics?
As supply chain disruptions continue the procurement function should adapt to improve transparency, build collaborative relationships, and ensure sustainable sourcing practices, resulting in a stronger, more resilient supply chain with Cloud ERP for manufacturing. Strategic sourcing with Cloud ERP.
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.
The topic/report will be on the logistics M&A so far this year. The report will be available free for paid Substack subscribers but I’ll provide a summary and a link to the report in case you’re interested in either purchasing it separately or paying for an anuual subscribtion to my Substack articles.
One should keep in mind that every transaction has an additional hidden cost in labor and overheads, such as the time spent sourcing products, tracking deliveries, matching invoices, and overseeing suppliers. In the article, we look critically at the role of the purchasing manager and discuss how to determine the value of hiring one.
Whether you''re a manufacturing company in China, a sourcing agent in London or a world''s leading company in Silicon Valley, we''re all in a global supply chain networks. It is safe to say that if a warehouse operation is not implementing Lean, it is falling behind its competition.
Procurement Priorities for 2025 and Beyond The manufacturing industry is evolving rapidly, leaving Chief Procurement Officers (CPOs) grappling with challenges that could make or break their organizations. Amid economic uncertainties and geopolitical shifts, procurement leaders face mounting pressure to drive sustained growth.
Disruptions like the pandemic, supply shortages, global trade barriers, high customer expectations and inflation all add tremendous pressure on the procurement process. Despite this, only 33% of businesses invested in procurement and sourcing technologies. Using ERP to improve purchasing transparency.
While this new landscape means easier and faster product ordering for consumers, it puts traditional supply chains under unprecedented pressure to adapt their direct-to-consumer fulfillment, inventory management, and procurement strategies. However, many organizations struggle to balance efficiency with cost.
Disruptions like the pandemic, supply shortages, global trade barriers, high customer expectations and inflation all add tremendous pressure on the procurement process. Despite this, only 33% of businesses invested in procurement and sourcing technologies. Using ERP to improve purchasing transparency.
Bottom Line : In 2021 and beyond, customers are voting with their dollars for the manufacturers who excel at sustainable manufacturing and make a positive contribution to the environment, dominating B2B supply chains and B2C purchasing decisions. Reduce energy-related costs and drive down operating expenses by using more recyclable materials.
Here we give you eight real-world examples of how businesses use Kanban, a popular lean tool that’s helped companies in a huge range of sectors improve efficiency – especially those in the manufacturing industry. Kanban came from the same place as the wider principles of lean manufacturing: Toyota. The customer’s order is complete.
Supplier Diversification and Sourcing Challenges: Many organizations rely on a vast network of suppliers, sometimes numbering in the hundreds. Sourcing bespoke or specialized parts from overseas can add further complications, such as minimum order quantities, anti-dumping regulations, and sustainability audits.
When the world changes around you, and when it changes against you, what used to be a tailwind is now a headwind — you need to lean into that and figure out what to do because complaining isn’t a strategy.”. To improve your capability to manage demand shifts and customer expectations it is mandatory to have dual sourcing. CONCLUSION.
Reported April 24 Over 60% of our business is from products that are manufactured, bagged, assembled or grown in the United States and only 12% of our business is direct imports. Recall, we purchased targeted additional inventory in late fiscal '25 and early fiscal '26, ahead of tariffs. Christopher J.
We’re talking real-time tracking, automated purchasing, and a whole lot less stress. Its your single source of truth for inventory, constantly updated and readily available. Automated Purchase Order Generation: Maintain optimal stock levels by automatically generating purchase orders when supplies run low.
Unlike most of the KPIs we recommend, perfect order is a composite of several elementary metrics. Perfect order results can help you assess performance and diagnose issues impacting service, costs, and overall supply chain effectiveness. What about DIFOT?
Gagan was reporting to the CIO, and the board of directors recently mandated the company embark on a digital transformation journey. Any newer digital technology portfolios would be cloud-based and mobile, and where appropriate, open source. He was lean and fit, looked ten years younger and was in high spirits. The result?
image source: [link]. Analytics: empowering users with transparent prescriptive analytics (optimization) capabilities to generate scenarios and solutions automatically. A modeling and analytics environment like AIMMS allows companies to overcome these limitations. Overcoming the 5 dysfunctions.
During the 2008 recession, Walmart strengthened its supply chain by investing in predictiveanalytics and real-time demand forecasting. Diversify and Strengthen Your Supplier Network for Reliable Sourcing Overreliance on a single supplier or geographic region increases vulnerability during economic disruptions.
There are two things Boeing and Airbus have in common, utilization of lean manufacturing system and strategic sourcing concept. However, the overall implementation of strategic sourcing is a bit different between the two companies. Moreover, products can be shipped to stores in-time then lost sales is minimal.
In their time lean manufacturing and just-in-time were game-changing concepts. Sudden demand spikes, precipitous demand drops, supply disruptions, production line shutdowns and other events can only be managed by early prediction and real-time responsiveness. In 2021 it is an entirely new game.
No Purchase Orders were used. There was no inventory carrying costs or concern for inventory turns. Lean Inventory: Using Lean Initiatives To Manage Inventory. More firms are implementing lean inventory management techniques to reduce costs, improve flexibility and have more time to focus on their customers.
NASDAQ: AMSWA) today reported preliminary financial results for the second quarter of fiscal year 2022. For the six months ended October 31, 2021, the Company reported operating earnings of approximately $4.5 Logility announced the partnership with Visus LLC to support analytics customers and their digital transformation journeys.
Insights gleaned from robust data analytics enable core business areas to identify opportunities for risk reduction, enhance operational efficiencies, and foster strategic initiatives that drive business growth. Handling Variability : AI technologies, particularly machine learning models, can handle various data formats and structures.
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