This site uses cookies to improve your experience. To help us insure we adhere to various privacy regulations, please select your country/region of residence. If you do not select a country, we will assume you are from the United States. Select your Cookie Settings or view our Privacy Policy and Terms of Use.
Cookie Settings
Cookies and similar technologies are used on this website for proper function of the website, for tracking performance analytics and for marketing purposes. We and some of our third-party providers may use cookie data for various purposes. Please review the cookie settings below and choose your preference.
Used for the proper function of the website
Used for monitoring website traffic and interactions
Cookie Settings
Cookies and similar technologies are used on this website for proper function of the website, for tracking performance analytics and for marketing purposes. We and some of our third-party providers may use cookie data for various purposes. Please review the cookie settings below and choose your preference.
Strictly Necessary: Used for the proper function of the website
Performance/Analytics: Used for monitoring website traffic and interactions
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.
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.
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. I continue to hope that organizations will get more serious on building networks. Tougher than most understand.
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.) I never calculated and accounted for the inter-dependencies between metrics.
Management and planning of the entire network against a value network strategy. Integration of corporate social responsibility metrics in planning. Supply Chain Design. Ad hoc design planning often focused on a function of the supply chain. There is a lack of clarity on what drives value and metrics are functional.
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.
In this volatile world, efficient procurement led by a CFO is not the answer. The company needs to focus on the design of flows, building outside-in processes, creating an effective supplier development group, reducing complexity, and driving bi-directional orchestration to a balanced scorecard. What is the issue?
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 metrics reward functional thinking. The focus of APICS is manufacturing, CSCMP’s foundation is in logistics, and ISM serves the procurement organization. The use of networkdesign technologies along with simulation through a center of excellence can greatly improve the gap between finance and the supply chain organization.
Metrics such as lead-times, forecast accuracy, inventory levels, and service are used to measure operational risks. Design and planning software has been utilized for the last several decades to manage these operational risks. What is the cost impact of making changes? Nari Viswanathan is currently Sr.
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. The company was designated an essential business that needed to stay open.
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 service metrics. The Effective Frontier.
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.
Granular data by volume is a must to be able to manage replenishment, networkdesign, and inventory targets. No metric should be measured in isolation, and functional metrics should be replaced with the balanced scorecard metrics shown in Figure 2. The issues include: Level of granularity. Time horizon.
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.
Organizations can align to drive value despite the allegiance to functional metrics. As long as companies are motivated by functional metrics, inventory management will be an enigma. When companies reward OEE in manufacturing and POV in procurement, companies will systemically make the wrong stuff. Mistake #5. Measurement.
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.
Global supply chain leaders understand that designing and implementing a robust risk management practices are essential and fundamental to running the business. Companies with advanced risk management programs redesign the role of procurement to build, not just audit, value chain relationships. In my life time, supply chains changed.
Demand-driven concepts are expansive they extend from the customer’s customer to the supplier’s supplier, but the areas of sales and procurement are often very resistant to the demand-driven concepts. Actively design the network with clear push/pull boundaries and right size buffers. Only 1% of companies have defined this role.
Alternate Bill of Materials and Alternate Sourcing: The more alternatives that exist through the manufacturing and procurement processes, the easier it is to design the supply chain to absorb cost and supplier variability. Additionally, through network strategies, be sure to design your warehouses for flows.
In our research for the book Supply Chain Metrics That Matter , we find that this is the case for 90% of companies. Instead, invest in a networkdesign group to understand your potential. Ask the team to use supply chain networkdesign models to determine what is possible in the supply chain. You are not alone.
It covers the basics of procurement, including procurement strategies, contract management, and supplier selection. You’ll also learn about supply chain management and the various stages of the procurement process. The course is designed to be interactive, engaging, and easy to follow. Fresh, easy to digest format.
Executives need to drive the supply chain design process. Large enterprises are consolidating the formerly independent functions of procurement and logistics and creating broader supply chain executive functions and responsibility. An end-to-end view of the supply chain is critical to maximize benefit potential.
Metrics and Key Performance Indicators (KPIs) measure how well the shipper-transportation provider does in daily continuous improvement. Sustained cost reduction is not realized through infrequent transportation networkdesigns and carrier RFQ’s. Measure Transportation Performance. Perform Transportation Daily Event Management.
Each are good at localized planning within a focused area of demand, supply, networkdesign, transportation planning, material sourcing or finite scheduling. Few implementations of planning connect to procurement and transportation. Process Integration Across Functions.
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. New knowledge and insights from machine learning are revolutionizing supply chain management as a result.
Therefore, better networkdesign, planning and operations are all needed, and all of which might not be completely satisfactory. In the meantime, companies need to make sure they have the most talented negotiators and leaders heading up their procurement and supply chain functions.
There are systems directors in both the procurement and logistics/planning teams. The team also leverages insights from university research centers and consulting groups, including CAPS Research, MIT, XEM, Gartner, ProcureCon, and Procurement Leaders, to ensure they are connected to emerging ideas.
billion metric tons—the emissions have rebounded in 2021 and 2022. In the case of manufacturers, it means procuring green and sustainable raw materials. Network optimization. These are challenges that will only become more threatening if they are not curbed, paying strict attention to supply chain sustainability.
While AI often triggers an autonomous execution-based response, functional managers continue to play a key role by taking innovative actions, like creating an alternative networkdesign, that re-set logistics operations for continued success.
They lack the greater understanding of planning and value networkdesign. Generalize procurement of materials. Some helpful reports include: Supply Chain Metrics That Matter: The Cash-to-Cash Cycle. Supply Chain Metrics That Matter: A Focus on the Pharmaceutical Industry. Please use this link: [link].
Push past the focus on transactional processes like order-to-cash and procure-to-pay and drive alignment and cost awareness in cross-functional processes like Sales and Operations Planning, Cost-to-Serve and Supplier Development. Be prepared to answer the question of which metrics drive the greatest value. Plan by design.
My first Monday in, I asked for a full report of all our supply chain metrics, and my analyst told me he could get it to me by Friday. Tom notes that “At Flex, we have a tool called SimFlex, which is a supply chain simulator that allows us to look at our networkdesign. I told him I needed it NOW, not in a week.
NetworkDesign. The overall objective of networkdesign is to develop the most efficient network possible, meet your customers’ service requirements, and accomplish this at the lowest viable cost. Although pandemic recovery will increasingly benefit from the experience we gain month by month.
We organize all of the trending information in your field so you don't have to. Join 102,000+ users and stay up to date on the latest articles your peers are reading.
You know about us, now we want to get to know you!
Let's personalize your content
Let's get even more personalized
We recognize your account from another site in our network, please click 'Send Email' below to continue with verifying your account and setting a password.
Let's personalize your content