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In follow-up qualitative interviews, one of the largest issues with organizational alignment was metric definition and a clear definition of supply chain excellence. To manage continuous improvement, companies need a clear definition of excellence and organizational alignment to that goal. What Drives Value?
Supply chain excellence is easier to say than to explain. 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. In short, the individual metric will improve, but the performance on other metrics may suffer.
Reason #4 Making key decisions by modelling the supply chain in Excel. Reason #9 Relentless pursuit of one supply chain metric at the expense of other metrics. Yet, these are similar instructions as what is passed down to the supply chain from executives focused on a specific supply chain metric. Sound ridiculous?
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.
” Followed by “How are you organized, and what defines functional excellence? And, how do you tie functional excellence to corporate value?” Companies became less clear on the definition of supply chain excellence and how to implement decision support technologies. Functional Metrics. False Beliefs.
When making discretionary purchases, I could look at my projection to make sure that if I made that purchase, I would have enough money in the bank, not only now, but at the end of the month when my mortgage and car loan came out. Then could I buy it? Planning systems, however, are not designed to allow you to ask ‘what if?’
As the only woman on the team, I always laughed that I had no place to put it, but I did not buck the system. Engineers could sign up for hour-long blocks to use the new systems. The tight integration of APS to ERP introduces nervousness in complex systems.) Lack of aligned metrics. Lack of executive buy-in.
How aligned do you believe your organization is to drive these metrics? Observations on What It Takes In the Mea Culpa post, I wrote that I used to believe that excellence in S&OP was a ratio of 60/30/10. (60% The demand latency (the time of purchase in the channel to the visibility of an order) was 2-12 weeks.
Needless to say they have a continued multi-year deployment of the supply chain planning system provided by the ERP vendor. They have piloted the process in Excel and know that they need an enterprise level solution for a global roll-out of S&OP. However, excellence in corporate planning matters. Their words.
The systems–based on shipment and order data–were out of step with the market. With fixed models and hard-wired data feeds, teams could not adjust the planning systems to use consumption data or market indicators. Initially, the output was published to procurement to design strategic buying strategies. The reason?
How Do You Define Excellence? In retrospect, I find that technology is an enabler, but only if we are clear on what defines supply chain excellence. Many believe that an ex-supply chain exec knows the definition of supply chain excellence. The group’s response is, “Are these supply chain metrics?”
We’ll examine the key components of efficient supply chains, explore essential performance metrics, and uncover the fundamental drivers that influence efficiency. An efficient procurement process optimizes vendor selection and purchasing decisions to maintain cost-effective inventory levels.
The classical approach involves functional silos, sequential decisions, and Excel and people to render a plan executable. Theory and practical implications are clear: optimizing each silo does not imply optimizing the end-to-end system. The planning process should be automated, repeatable, and not dependent on Excel-based manipulation.
As McCarthy put it, after a customer buys a bed, it’s his responsibility “to make sure we deliver it to their home brilliantly.” Getting real-time data from telematics and feeding it back into the planning system for ongoing process improvement is critical.
Ultimately, what KPIs, as metrics and indicators derived from the set of plans are taken into account and prepared for each scenario. Working with Excel spreadsheets does not contribute the efficiency, speed and agility necessary for planning teams to bring the best plans to the company. Technology for Effective Planning.
It was a story where people believed that functional excellence leads to supply chain superiority. Year after year, well intentioned people toiled against improving metrics that reduced, not improved, the effectiveness of the supply chain. I feel that continued investment in multi-year ERP systems is the big, bad wolf.
With the purchase of i2 by JDA, and Logictools by IBM, manufacturing companies serious about network design started looking for a company, with a well-established community, that was more serious about network design. As Sales and Operations Planning became more important, supply chain design became more systemic. The gap is tough.
While there is work within SAP to rethink SNC and use the assets purchased with Ariba to build multi-tier capabilities, the progress is not encouraging. the company is owned today by 20 organizations representing manufacturers, distributors, hospitals and group purchasing organizations (GPOs). Marketplace Rebirth.
Millions of shoppers, like my Dad, are not going back to their old habits because there are now faster and more convenient ways for buying daily household needs. It excels on a union of E-Commerce mobile apps and last-mile delivery innovations. It also provides an excellent part-time employment opportunity with flexible shifts.
Ask yourself, “Are your supply chain metrics bogging you down?” ” To manage a supply chain containing complex dependencies between teams, departments and partner companies across international boundaries requires a rich set of metrics. Functionally isolated metrics lead to sub-optimized supply chain performance.
Theme 2: Online buying will fuel home delivery growth, challenges and new strategies. In 2023, consumers will be less forgiving and poised to buy from retailers whose delivery performance is commensurate with the rest of the shopping experience. Figure 1: U.S. Container Import Volume Year-over-Year Comparison. Somewhat nailed it.
The promise was the delivery of a decision support system that would allow the organization to optimize the relationships between cash, cost and customer service against the strategy. By purchasing planning and transactional systems for a common vendor, they had one throat to choke and they were familiar with the architectural elements.
With rising costs and declining margins, health systems must become more efficient and productive. Now, of course the systems of healthcare differ but overall the level and growth is certainly a concern. The Path to Supply Chain Excellence. We believe that a key pillar of this transformation is the supply chain.
Or agreement on the definition of supply chain excellence. As a result, functional excellence anchors action. The focus is on digitization—automating today’s processes—versus rethinking process excellence based on the art of the possible. They believed that the system was driving improvement. Houston, We Have a Problem.
Well, we also know that many legacy systems will not be able to support all these changes quickly and cost-effectively. This is how composable systems work. So, when you are not happy with a specific aspect of a system, you don’t have to rip it off entirely and start over with a new system. Step 2 – Getting Smarter.
As an analyst in the supply chain market for 15 years, I have written many articles on best-of-breed technology companies purchased by a larger company. The Terra Technology investment is one of what we believe will be a series of purchases to build inter-enterprise cloud-based software platforms to redefine supply chain planning.
Driving an excellent supply chain depends on how people are recruited and managed, processes, and the technology used. 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. Getting the Most out of People.
If you are going to be excellent at ecommerce fulfillment, you need to have great perpetual inventory capabilities. It was great to see click and pay on the London tube, and I love some of the new models that are being developed in grocery and specialty stores for purchases on-line and pick-up at the stores. Don’t fool yourself.
Mr. Welty founded a company that sold warehouse management systems (WMS) called AllPoints Systems in 1987. The company buying his company, EXE Technologies, is now infamous among those who have followed the WMS market. We asked for $2 million to buy more robots and then shortly thereafter another $4m. Fail Until You Win.
This includes the convergence of the technologies shown in Figure 1 to define the autonomous supply chain; drive the availability of data at the speed of business for decision-making; the evolution of learning systems to sense, act and learn; and the building of outside-in processes/the automation of B2B value networks.
Available to Promise (ATP) Available to Promise (ATP) is a real-time inventory management metric that tells you how much of a product you can promise to customers without overcommitting. It supports smarter buying by showing which categories or products deliver the best ROI. Benchmark against your industry average for best insight.
Nick Lynch is the Global Excellence Manager at Shell Lubricants, a division of Shell Global. Completed in 2012, the ERP project forced the company to standardize organizational design, roles, and metrics. However, the goal of having a single integrated ERP system with the embedded functionality and modules was never achieved.
Optimization engines to improve functional metric performance resulted in an exploding number of planners. days to receive a purchase order confirmation. The average purchased order changes 3.5 The more integration points of Advanced Planning System (APS) to Enterprise Resource Planning (ERP), the larger the bullwhip impact.
I believed that the first generation of supply chain systems would improve operations to a greater degree than actually happened. I have learned that supply chain systems are more complex than I originally thought, and that the relationships between supply chain metrics are nonlinear. For me, this has been discovery. I am sorry.
There is an inverse relationship between margin and supply chain excellence. Zimmer’s strategic framework focuses on growth, operational excellence and prudent capital allocation. Leaders need to start a system to improve measurement and tie performance to buying incentives. I don’t think so. It matters more.
They each lag in their understanding of supply chain excellence, and are now struggling to build effective supply chain teams. On the webinar, when the participants were polled on the reason for rising inventories, over 50% of respondents indicated that it was the lack of an executive understanding of supply chain excellence.
To drive global scale, companies need to design the supply chain to buy globally and execute locally. The company leverages globally sourcing strategies to buy products at a lower cost and then deploys some unique process logic to drive mass customization for retailers. Performance on the Supply Chain Metrics That Matter.
However, my worldview is that the larger shifts are far more systemic requiring a call for action that is going largely unheard. The sad thing is that most companies will never know because they are blindly measuring the wrong metric and driving a supply-centric agenda. No doubt that these are issues. So, my reply to Peter S.
Cisco System Case Study. The only solid case study about supply chain risk is definitely from Cisco System. The company won the ISM 2012 Award for Excellence in Supply Management (category:process). In details, the whole system Cisco develops is far more complex than this. And according to the U.S. 2011: Thailand Floods.
Several customers addressed those questions in excellent case study presentations: Dr. Bernhard Herzog, Oxea GmbH – “Business Impact of a Supply Chain Operating Network”. But at the same time, supply chains are challenged by complex logistics, systems issues, legal requirements, and lack of resources.”
Needs for efficient reverse logistics systems continue to increase as e-commerce claims greater market share, and as so many traditionally functioning businesses grow and inevitably incur increasing volume of returns. meaningful and accurate performance metrics. reputation for excellence in reverse logistical results.
I have written many articles about Advanced Planning Systems (APS), Enterprise Resource Planning (ERP) and Advanced Inventory Optimization. So far I can only find one industry that has systemically reduced inventory and working capital over the ten-year period. The supply chain is a complex system. Here I give my logic.
This team is not buying the message. So much so, that three years ago, I founded a research company to focus on understanding supply chain excellence. This starts by clearly defining the roles of each function, and then focusing the cross-functional teams on the same metrics. “Lucky me,” I thought, and smiled.
“The idea of the value chain is based on the process view of organizations, the idea of seeing a manufacturing (or service) organisation as a system, made up of subsystems each with inputs, transformation processes and outputs. Our current processes and dependencies on Excel spreadsheets cannot get us to our goal.
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