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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. It is easier said than done.
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 A Case Study.
For organizations layered in functional metrics and driving a cost agenda, this is a tough nut to crack. During the pandemic, companies struggled with planning systems turning off the optimizers, and using the technology as a system of record. Show the technology vendors touting digital and AI transformation the door.
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. Many try to start with technology. What did we find? Responsive.
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.
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.
In particular, Ferguson’s supply chain is built for speed and to provide high service levels. The company sources goods from 34,000 suppliers out of 30 nations. Driving an excellent supply chain depends on how people are recruited and managed, processes, and the technology used. The company uses a networkdesigntool from Coupa.
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.”
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.
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. Connected technology transforms traditional supply chains into dynamic systems capable of real-time decisions and proactive problem-solving.
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? So, you might ask, why?
Source Merriam-Webster Dictionary. The article is written and the story is spun, but the solution offered is a supply-centric solution based on yesterday’s technology. The original principles of a value network that can sense, shape and translate demand with near-zero latency are being lost in the fog. The acronyms keep coming….
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. In the supply chain, variability and volatility come from many sources.
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.
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.
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.
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. Instead, it should be an information exchange virtual platform.
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.
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. Orchestration enables companies to effectively manage trade-offs between source, make, deliver and sell.)
The combination of technology along with the advancements in transportation made it possible. The traditional manufacturing job defined the middle class. Each time, I turn on the channel, manufacturing jobs frame the global debate. Connectivity enabled the growth of the global supply chain opening up markets driving opportunity.
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.
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.”
Back then, Anderson et al suggested that customer be segmented based on the service needs, namely, "sales and merchandising needs" and "order fulfillment needs". 2) Customize Logistics Network. When you segment a customer based on the service needs, you may have to tailor the different logistics networks to serve different segment.
In my work with manufacturing companies recently, I am thinking a lot about the need for diagnostic testing. 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.
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. Technology is used to help in this endeavor. Scope 2 emissions are indirect emissions from purchased energy.
” At the other end of the continuum is the argument that “ Forecast error is the most important metric to improve.” I worked for a software company for almost a decade and implemented demand management solutions in the 1990s for multiple companies. ” I am in the middle. Here I share my world view.
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.
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.
Blue Yonder Acquires Returns Manager h 1000+ That is the number of generative AI services and applications currently n progress or built, but that figure is a “small fraction” of what it plans to build. The Fed Downgrades GDP Forecast. FedEx Cuts CO2. Overall Scope 1 and 2 emissions intensity now stands at 179.50
Executive, after executive, lament, “They have purchased many technologies and sponsored many projects to reduce inventories, but they are not seeing results.” ” I have been studying the evolution of inventory technologies as an industry analyst since 2002. It is truly a case of process, people and technology.
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.,
At a Glance: We’ll be discussing some of the best supply chain management online courses from around the world from some of the most renowned platforms in education and supply chain, including SCMDOJO, CIPS, Coursera, MITx etc. It covers the basics of procurement, including procurement strategies, contract management, and supplier selection.
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.
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. Buffer Design.
Each are good at localized planning within a focused area of demand, supply, networkdesign, transportation planning, material sourcing or finite scheduling. The greatest value happens when companies can link across source, make and deliver. Few implementations of planning connect to procurement and transportation.
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.
New technology aims to make the supply chain more efficient, yet investing in the wrong technology further complicates productivity while hindering profitability. Sebastian Jungels @seb_jungels Sebastian is a co-founder at KAPUA , an enterprise SaaS provider, where he helps companies to improve their forecasting accuracy and speed.
End-to-end supply, transformation and distribution of goods has extended into a global, networked operation for many companies. At the same time, business system technology has evolved to help manage the multiplication of relationships and touch points. In this case, a lack of collaboration can have a real negative effect on business.
On Monday, I would speak in Orlando Florida at the Terra Technology event; and on Wednesday, present the keynote at the Logistic Summit & Expo in Mexico City. I am a manufacturing gal by training. Brain storm the impact of the collaborative economy, eCommerce, and shared service models. What drives my passion? Customization?
In most ‘benchmarking activities’, self-reported data is the most common source. However, for elements like forecast error, customer service and slow-moving inventory self-reported data is not sufficient. Debra built the Gartner Hierarchy of supply chain metrics. Self-reporting of data does not meet this standard.
The are the 8 Rights of Lean Transportation thinking: Right Materials, Right Quantity, Right time, Right Place, Right Source, Right Price, Right Quantity, and. Right Service. Metrics and Key Performance Indicators (KPIs) measure how well the shipper-transportation provider does in daily continuous improvement. If not, Why?
BBB Industries’ sustainable manufacturing processes using recycled materials reduced GHG emissions by 38% compared to virgin resource production. Teams must fully understand the concept and goals, and be equipped with the tools to enact change. NetworkDesign Today’s supply chain networks optimize for linear material flows.
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
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