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” I advise for clients to maximize the value of SAP as a system of record and start to build the concepts and flows for the next generation of planning as a system of insights. In today’s architectures and functional metrics, value optimization does not exist. You are right. This work was expensive.
In follow-up qualitative interviews, one of the largest issues with organizational alignment was metric definition and a clear definition of supply chain excellence. In my post Mea Culpa, I reference my work with the Gartner Supply Chain Hierarchy of Metrics. Error is error, but is it the most important metric? My answer is no.
While past efforts focused on meeting compliance requirements, organizations are now working to proactively embed environmental, social, and governance (ESG) principles into their sourcing, production, and distribution activities. Building supplier capabilities while maintaining sourcing flexibility requires additional investment.
From balancing cost-efficiency with ethical sourcing to enhancing transparency and integrating corporate social responsibility (CSR), businesses face mounting pressure to align their operations with sustainability, technology, and energy practices. The energy sector provides a compelling example of CSR-driven compliance.
Proactively adopting cleaner energy sources ensures alignment with these evolving regulations. The industry’s dependency on traditional energy sources necessitates an urgent shift toward cleaner alternatives. Transparent sourcing practices build trust among consumers and investors.
We’ve seen AI take over everyday tools and search engines; AI in Sourcing and Procurement is becoming a strategic tool in our kit, At Ivalua, we are helping global procurement teams integrate AI across the Source-to-Pay process, bringing automation, insight, and agility to every step. This is where AI can make a huge difference.
Senior leaders must think beyond incremental improvements, embracing systemic innovation to achieve significant environmental impact. Smart energy management systems further enhance efficiency by tracking and optimizing energy use in real-time. Ethical sourcing is a fundamental aspect of social sustainability.
It creates a single source of truth for your rate management, automating RFQs and streamlining the entire procurement process. billion rate data points monthly to provide the most comprehensive view of the market, helping you identify savings opportunities and make data-driven decisions.
Many large organizations have multiple systems for order, warehouse, or transportation management that are barely integrated frequently not at all. Optimizing fulfillment requires a series of steps to get a shipment from its source to the end customer. The ability to meet fulfillment goals is impeded by several issues.
Reducing cost was the primary objective, and most operational decisionsfrom sourcing to fulfillmentreflected that mindset. All of this points to a larger issue: systems that perform well under stable conditions but lack the flexibility to respond when those conditions change. Metrics must reflect the new priorities.
(Inventory is both our most important buffer and greatest source of waste.) Functional metrics align to bonus incentives, but progress in supply chains remains evasive. Muda comes from many sources. They cannot access data directly from planning systems. Human Potential. Does it increase error and inventory targets?
The issue is that when companies optimize functional metrics, they throw the supply chain out of balance and sub-optimize value. Planners evolved in the 1980s when planning systems were not scalable and memory was expensive. The most efficient supply chain (in terms of lowest cost) is not the most effective. The reasons are many.
Misaligned priorities, siloed systems, and unclear ownership can directly impact key performance indicators like cost savings percentage and procurement cycle time. In many organizations, procurement also plays a critical role in ESG compliance, innovation sourcing, and maintaining business continuity during supply disruptions.
The research methodology for the Supply Chains to Admire compares the performance of a company against its industry peer group for the metrics of Year-over-Year Revenue Growth, Inventory Turns, Operating Margin, and Return on Capital Employed (ROCE). For 80% of industries, the supply chain metrics represent more than 40% impact on value.
If you’re evaluating procurement technology or exploring ways to drive more value from existing systems, chances are you’re looking beyond tactical fixes – you want a smarter, scalable strategy. But when spend is scattered across systems, business units, and suppliers, finding those insights is easier said than done.
AI is reshaping the way organizations source, manage suppliers, and drive value today. AI agents offer a smarter, faster way to manage sourcing, risk, and spend across the entire procurement lifecycle. This refers to AI systems that act with autonomy and are programmed to accomplish specific goals.
AI is reshaping the way organizations source, manage suppliers, and drive value today. AI agents offer a smarter, faster way to manage sourcing, risk, and spend across the entire procurement lifecycle. This refers to AI systems that act with autonomy and are programmed to accomplish specific goals.
A disruption at any point in the global logistics network including the average of 12 touch points from shipment packaging to final delivery can prove disastrous for profits, service levels, customer loyalty, and other key metrics. With the global e-commerce market predicted to reach $8.1
It creates a single source of truth for your rate management, automating RFQs and streamlining the entire procurement process. billion rate data points monthly to provide the most comprehensive view of the market, helping you identify savings opportunities and make data-driven decisions.
The supply chain is a complex non-linear system. 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.) A case is not a case.
We’ll examine the key components of efficient supply chains, explore essential performance metrics, and uncover the fundamental drivers that influence efficiency. Production: Efficient production systems maximize resource utilization through standardized procedures.
On top of that, we’ll break down how to approach selecting the right centralized purchasing system for your business needs. Signs your company needs a centralized purchasing system Key benefits of centralized procurement How to efficiently implement centralized procurement Frequently Asked Questions What is centralized purchasing?
They need visibility across multiple internal systemslike ERP, CRM, and financial platformsand even external sources shared with suppliers, partners, and customers. Thats why modern BI systems are quickly becoming the go-to solution for data-driven enterprises. Think of it as the central nervous system of your analytics ecosystem.
It’s the key to transforming your supply chain from a source of frustration into a well-oiled, profit-generating machine. Connected technology transforms traditional supply chains into dynamic systems capable of real-time decisions and proactive problem-solving. That’s where data analytics comes in.
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. Customer-Centric Supply Chain.
Digital procurement streamlines workflows and unifies data, enabling faster sourcing, better collaboration, and improved accuracy. Digital procurement is the use of digital technologies to enhance, automate, and optimize procurement processes across the entire source-to-pay (S2P) lifecycle.
In this final blog on agility and why you should consider becoming an agilist to survive the new completion (of the continuous mention) of the application of enterprise decision management systems (EDMS) from Taylor and Raden cited in the first blog, I turn to the metric of agility and a new ROI metric of decision yield.
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. Build in-market sourcing. Tougher than most understand.
Modern ML-powered demand planning systems simplify this by analyzing multiple factors simultaneously – product trends, competitive pricing, market conditions, and social media activity – to uncover patterns in promotional events and quantify their precise effect on sales.
Agentic AI involves creating a system of interacting agents, each trained on a specific task or dataset. They prepare equipment for maintenance, do isolation (disconnect a piece of equipment from the flow of chemicals by closing valves), look at quality or reliability metrics, and do rounds. Al Syed elaborated. Celanese has 2.5
Functional Metrics. With the implementation of transactional systems, the focus was on measuring and controlling functional metrics like the lowest manufacturing cost or purchase price variance in procurement. Few consultants understand the supply chain as a complex non-linear system. False Beliefs.
In this blog post, we’ll explore the challenges of inventory management in today’s manufacturing landscape , discuss the importance of a “single source of truth” for global inventory, and introduce a powerful solution that can help manufacturers transform their operations and drive profitability. How do they achieve this?
What is the Perfect Delivery Metric? Improving on this metric will always involve a focus on people and processes, but often also includes implementing new, more robust, supply chain applications. The wrong metrics drive suboptimal behaviors and metrics can often be manipulated.
Enterprise procurement leaders are under more pressure than ever—juggling cost control, compliance, supplier risk, and internal complexity, all while trying to modernize outdated systems. AI, automation, and generative tools are redefining efficiency, allowing procurement teams to move from reactive to proactive decision-making.
As regulations across the globe strengthen, the pressure to collect, report, and organize emission-related metrics has never been higher. Across the globe, requirements for stricter reporting on complex metrics are increasing. If the resources and software are applicable, automate as much of your data collection as possible.
Understanding Modern Warehouse Mobility Solutions for Enhanced Warehouse Productivity Mobile warehouse solutions combine portable devices, specialized apps, and real-time data systems to boost operational efficiency. Paperless Warehouse Management System Going paperless with mobile devices streamlines task management.
Define business objectives: Clearly define the business objectives and key performance indicators (KPIs) that your AI-driven supply chain management system aims to optimize. Collaborative discussions can help identify relevant data sources and metrics that capture the end-to-end supply chain process and align with overall business goals.
Tracking the Metrics that Matter. While Ardent expects Procurement to rise to and tackle these challenges, tracking the metrics that matter will help them stay focused for full recovery. Inflation Metrics. Savings from Sourcing: In 2021, competitive sourcing projects generated an average of 7.7% Risk Metrics.
Strategic Sourcing Simplified: Best Practices for Maximizing Value Strategic sourcing goes beyond cost savings its about making informed decisions that drive long-term value. Now well dive into best practices in these critical areas to ensure a more effective and resilient sourcing strategy.
Enlightened leadership that focuses on the management of the supply chain as a complex system. Aligned Metrics. To ensure the management of the complex system, the metrics of operating margin, inventory turns, ROIC, customer service, revenue, and forecast accuracy need to be managed together as a non-linear system.
The Power of Source-to-Pay Digital Transformation To put it briefly, source-to-pay refers to the entire process that starts with finding, negotiating with, and contracting the suppliers of materials, goods and services, and culminates in the final payment for those items. Who Should Prioritize an S2P Digital Transformation?
While there are many types of visibility (see Figure 1), the most common use case is either sourcing or transportation visibility. What most companies want is a system with prescriptive analytics to tell them when a shipment is expected to be late and what action to take. Supply chains are complex, non-linear systems.
The source data for the analysis comes from Ycharts.). The supply chain is a complex nonlinear system. We selected these metrics based on correlation work with Arizona State University in 2012. There is no industry definition of supply chain excellence, nor is there a perfect measurement system. Let’s explore why.
Current planning taxonomies do not plan across make, source, and deliver answers bi-directionally. Continual reaction to real-time data streams introduces nervousness into the system. Integrating data does not align an organization motivated by functional metrics. .” And most are linear progressions devoid of sensing.
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