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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.) Supply chain excellence was largely defined as manufacturing excellence.
For organizations layered in functional metrics and driving a cost agenda, this is a tough nut to crack. In the face of variability, this is two-to-six weeks too long to make allocation or procurement decisions. Build in-market sourcing. Rationalize global strategies to focus on building markets based on in-market sourcing.
I have learned that supply chain systems are more complex than I originally thought, and that the relationships between supply chain metrics are nonlinear. In my work on the Supply Chain Index , I see that companies I recognize as doing networkdesign well are rising faster on the list of the Supply Chain Index work.
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. Reward teams for cross-functional metrics. NetworkDesign Analysis.
Manufacturing is designed and planned in isolation. Management and planning of the entire network against a value network strategy. Integration of corporate social responsibility metrics in planning. Comprehensive view of source, make and deliver. Frequent and systemic supply chain design.
The market for networkdesign tools 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. Today, supply chain design has become a process all to its own. Instead, it needed to be steps of continuous designs. The reason?
Management practices such as lean manufacturing and just-in-time inventory management, along with globalization, have made tremendous impact on cost and service, but have accentuated risk. Metrics such as lead-times, forecast accuracy, inventory levels, and service are used to measure operational risks. are most exposed to risk?
Especially grievous are the gaps between finance and operations, manufacturing and procurement, and the operations and commercial teams. Each requires design and fine tuning. However, only 9% of companies actively design their supply chains. Build Strong Supply Chain Sourcing Development Practices. We are to blame.”
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.” What is the issue? These capabilities do not exist at Ford.
The company sources goods from 34,000 suppliers out of 30 nations. In the annual report where they report on their key performance indicators (KPIs), they don’t just report on core financial metrics and the NPS, they also have people metrics. The company has shown sustained improvement on this metric.
It’s the key to transforming your supply chain from a source of frustration into a well-oiled, profit-generating machine. Forget static networkdesigns and gut-feel decisions. Integration of Data Sources Data integration connects different information streams to create a single view of your supply chain. The result?
Source Merriam-Webster Dictionary. They are step change requiring either the redeployment of existing technologies or the purchase of new platforms. While SAP has purchased SmartOps and is marketing a demand sensing/demand translation offering, I have not been able to validate the solution through references. Details matter.
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. For example, in manufacturing, the shift in focus is away from OEE to focus on first pass yield and schedule adherence.)
Procurement has never played such an important role in the increasingly globalised economy. Has procurement fundamentally changed itself in the past 10 years? Strategic Procurement can mean totally different things in different industries and sectors. The time when Procurement was almost a synonym to Purchasing has long gone.
Year after year, well intentioned people toiled against improving metrics that reduced, not improved, the effectiveness of the supply chain. The example that I give in the first post is the focus of manufacturing strategies to drive strong results to improve Return on Assets (ROA) that have actually caused a deterioration in operating margin.
My first job was in manufacturing in the 1980’s. In the traditional supply chain world, the processes of sell, deliver, make, source, and plan are separate and distinct. The metrics reward functional thinking. In our research, the networkdesign maturity model shown in Table 1 is helpful to many of our clients.
Continuing Disruptions in Transportation and Sourcing Materials After the pandemic, retailers are faced with new challenges and disruptions due to global conflicts, trade restrictions, and now recessions. They are more likely to shop for discounts and sales and may delay purchases of some items.
In the supply chain, variability and volatility come from many sources. The best way to start the design of an agile supply chain is to look at the sources of variability and market volatility that your supply chain encountered in the prior year. Ten years ago, the supply chain had two buffers: manufacturing and inventory.
Notice how the water turns from blue to brown in Figure 3 with the lack of demand translation capabilities within the enterprise for manufacturing and logistics. Orchestration enables companies to effectively manage trade-offs between source, make, deliver and sell.) We source this data from Y charts. Mistake #3. My challenge?
The number one question that I am asked today by manufacturers across all industries is “How can I improve customer service?” Granular data by volume is a must to be able to manage replenishment, networkdesign, and inventory targets. The two primary buffers in the supply chain are manufacturing capacity and inventory.
The traditional manufacturing job defined the middle class. Each time, I turn on the channel, manufacturing jobs frame the global debate. Ironically, as global manufacturing jobs decrease, there is a need for talent for the global supply chain. Design planning processes to enable product lifecycle sensing. 5) Design.
Let me start with a true confession: I am a manufacturing gal. I relished the sound of a manufacturing line when I opened the door of the factory in the morning, and I liked managing inputs so that we could maximize outputs. Manufacturing is the foundation of my interest in supply chain management. Supply Chain and Design.
In the survey, APQC used a series of performance metrics, including net promoter score, customer retention rate, perfect order performance, and on-time delivery among others, to identify the top performing companies. This shows that all companies still have a long way to go when it comes to fuel consumption from renewable sources.
For example, if you were a contract manufacturer in China, you might already have different logistics networks for different customers. Each customer in US or EU might already control the source of raw materials, ask you to provide dedicated production lines, nominate 3pl companies and air/sea carriers.
Manage Make, Source, and Deliver Together. At the enterprise level, manufacturers and retailers focus on corporate efficiency. Figure 1: Current State of a Global Manufacturer of White Goods. Change internal metrics to a balanced scorecard and force the functions to work better together. All are out of balance.
294 manufacturing facilities produced more than 90 million metric tons of food and beverage in 2021. PepsiCo products then reach shelves through its operating subsidiaries and a complex network of fleet operations. Scope 1 emissions include direct emissions from the company’s owned and controlled sources.
Manage Make, Source, and Deliver Together. At the enterprise level, manufacturers and retailers focus on corporate efficiency. Figure 1: Current State of a Global Manufacturer of White Goods. Change internal metrics to a balanced scorecard and force the functions to work better together. All are out of balance.
Especially grievous are the gaps between finance and operations, manufacturing and procurement, and the operations and commercial teams. Each requires design and fine tuning. However, only 9% of companies actively design their supply chains. Build Strong Supply Chain Sourcing Development Practices. We are to blame.”
Especially grievous are the gaps between finance and operations, manufacturing and procurement, and the operations and commercial teams. Each requires design and fine tuning. However, only 9% of companies actively design their supply chains. Build Strong Supply Chain Sourcing Development Practices. We are to blame.”
” At the other end of the continuum is the argument that “ Forecast error is the most important metric to improve.” I also worked in manufacturing during the period of 1978-1992 trying to plan demand. This is Planning by Design. ” I am in the middle. Here I share my world view. Everyone has a bias.
49% That was the ownership share of product returns specialist Inmar Post-Purchase Solutions (IPPS), a joint venture between Doddle—a part of Blue Yonder—and Inmar, Inc. metric tons of CO2 equivalent per million USD in revenue, down 58% from FY09 levels, despite daily package volumes rising by an average of 121%.
The source data for the analysis is public reporting of balance sheets and income statements. Check out their performance by plotting year-over-year metrics at the intersection of two ratios and look at the patterns. In the analysis of the Supply Chains to Admire, we use PTBV as a proxy metric of value.
Process manufacturers face a highly complex supply chain challenge. Add to these factors such as razor-thin margins, SKU-proliferation, globalization, and products that tend to be heavy, bulky and/or expensive to move and it quickly becomes apparent why process manufacturing supply chains are very challenging.
In my work with manufacturing companies recently, I am thinking a lot about the need for diagnostic testing. ” Or alternatively, “Is there data that could be sourced to help?” This requires analysis using networkdesign and inventory optimization technologies. As a group, we drill into root issues.
The are the 8 Rights of Lean Transportation thinking: Right Materials, Right Quantity, Right time, Right Place, Right Source, Right Price, Right Quantity, and. Metrics and Key Performance Indicators (KPIs) measure how well the shipper-transportation provider does in daily continuous improvement. Right Service. Problem-solving methods.
The definition: an adaptive network focused on a well-defined value-based outcomes. The network senses, translates, and orchestrates market changes (buy- and sell-side markets) bidirectionally with near real-time data to align sell, deliver, make and sourcing organizations outside-in. Buffer Design.
I am a manufacturing gal by training. While traditional supply chain processes evolved from functional excellence definitions for source, make and deliver from the inside-out; to make the digital pivot and become more market-driven, companies need to define new supply chain processes outside-in. What drives my passion? Bio-engineering?
In most ‘benchmarking activities’, self-reported data is the most common source. It is for this reason, that I discount the reporting by APQC, Institute of Business Forecasting (IBF) and Grocery Manufacturing Association (GMA) benchmarking data. Debra built the Gartner Hierarchy of supply chain metrics. My takeaway?
Key factors influencing inventory levels, supplier quality, demand forecasting, procure-to-pay, order-to-cash, production planning, transportation management and more are becoming known for the first time. Source: Machine Learning – A Giant Leap for Supply Chain Forecasting, Material Handling and Logistics Conference (PDF, 28 pp.,
Process chemical manufacturers face complex supply chain challenges including dealing with hazardous and perishable ingredients whose characteristics (potency, color, composition, etc.) I believe there are several key ingredients to formulating a winning process manufacturing supply chain. can vary from lot to lot.
The source data for the analysis is public reporting of balance sheets and income statements. Check out their performance by plotting year-over-year metrics at the intersection of two ratios and look at the patterns. In the analysis of the Supply Chains to Admire, we use PTBV as a proxy metric of value.
Executive, after executive, lament, “They have purchased many technologies and sponsored many projects to reduce inventories, but they are not seeing results.” We are systemically evaluating each industry in the Supply Chain Insights Metrics That Matter series of reports. At Supply Chain Insights , this is our passion.
Therefore, the challenge to establish the ranking method is to find a more economical data source and the unbiased metrics. Books We Recommend - Purchasing Book - Six Sigma Books - Operations Management Book - Inventory Control Book - Lean Books - International Business Book Last review and update: January 30, 2020
BBB Industries’ sustainable manufacturing processes using recycled materials reduced GHG emissions by 38% compared to virgin resource production. NetworkDesign Today’s supply chain networks optimize for linear material flows. The right rebate or trade-in program can encourage additional purchases.
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