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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.
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.
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.
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.
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.
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.
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.
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.
I worked three layers down in the organization for a well-established leader in manufacturing named Dan. Fred owned logistics and customer service for the organization. Dan had a very manufacturing view and Fred focused on logistics. The metrics were not aligned. Use networkdesign and planning tools to show flow.)
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. Design Your Value Chains. The gaps between business leaders grew.
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. We produce there because the regulations say that you need to manufacture there to sell there.
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.
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. With the use of advanced technologies, planning decisions can also be automated.
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.
In manufacturing, IoT sensors ensure that each step of the process is tracked, ensuring that all materials meet required quality standards. Another challenge is device compatibility—different manufacturers produce IoT devices with varying standards, making it difficult to ensure frictionless communication between systems.
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. Additionally, through network strategies, be sure to design your warehouses for flows.
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.
My first job was in manufacturing in the 1980’s. The metrics reward functional thinking. The focus of APICS is manufacturing, CSCMP’s foundation is in logistics, and ISM serves the procurement organization. In our research, the networkdesign maturity model shown in Table 1 is helpful to many of our clients.
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.
While I will know more when I finish the research than I do now, I want to encourage all readers in manufacturing and retail to participate. Active Work on Design and Modify. Networkdesigntechnologies are growing up and becoming part of enterprise architectures. Metrics Matter. It will close on March 15th.
While I will know more when I finish the research than I do now, I want to encourage all readers in manufacturing and retail to participate. Active Work on Design and Modify. Networkdesigntechnologies are growing up and becoming part of enterprise architectures. Metrics Matter. It will close on March 15th.
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.
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.
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.
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. Their current technologies are inadequate. It is still early.
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.
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. Organizations can align to drive value despite the allegiance to functional metrics.
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. Design Your Value Chains. The gaps between business leaders grew.
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. Design Your Value Chains. The gaps between business leaders grew.
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.)
” 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.
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. That news came from Jassy in a message to employees shared Tuesday.
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.
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. Invest in networkdesigntechnologies. All are out of balance.
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. Invest in networkdesigntechnologies. 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. Technology is used to help in this endeavor. PepsiCo’s Internal Supply Chain.
The use of unstructured text mining, and sentiment analysis, to understand and listen to customer responses to products and services in near real-time. Advanced companies are building cross-functional teams to use unstructured data to analyze warranty, quality and service failures. Buffer Design. Buffer Design.
Machine Learning and its core constructs are ideally suited for providing insights into improving supply chain management performance not available from previous technologies. The machine learning algorithms in IBM’s Watson platform were able to determine if a shipping container and.or no opt-in).
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.
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. Highlight course offerings including the pros and cons of each mentioned course/program.
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.
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.
Each are good at localized planning within a focused area of demand, supply, networkdesign, transportation planning, material sourcing or finite scheduling. The traditional advanced planning tool footprints did not give organizations a path to do this well. Supply chain planning is decision support technology.
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