Daily Archives: August 9, 2013

Squeezing the Most Out of Your Supply Chain

Supply chain investment is finally on the rise again, but many companies are finding that effectiveness still declines over time after the introduction of a new solutiould be n, be it technology, business process, outsourcing, or some combination thereof. Why is your average supply chain, which, by now, should be powered by best-of-breed technologies, still not operating at peak efficiency? I’d argue that there are a number of reasons, including a continued lack of proper visibility, a continued lack of proper monitoring processes, and a continued lack of proper training, but a classic article in Supply and Demand Chain Executive takes a different twist. In Squeezing the Most Out of Your Supply Chain, the author, who notes that it is likely that your average supply chain is not operating at peak efficiency, indicates that a supply chain opportunity assessment can help you you determine if, and where, this is happening. This would imply that one of the reasons your supply chain is still not efficient, five years later, is that your average company probably doesn’t know where it should be focussing and that the systems it is employing might not be the right systems or the systems the company needs the most. Given that very few companies do detailed assessments before deciding what they need, instead waiting for a major disruption or fiasco that needs to be dealt with reactively, SI has to agree.

A supply chain opportunity assessment gives your company a complete look at the overall state of one of its most critical functions and provides your company with a comprehensive list of opportunities for improvement. With this knowledge, your company can define a set of actions to improve its operating efficiency and ensure that its supply chain is properly designed to support growth and flexibility to prevent supply disruption.

A supply chain assessment is a straightforward process, which, as per the classic article, can be boiled down to a succinct series of steps.

  1. Define the scope.
    Business Unit or Entire Operation? Subset of processes or full spectrum? Although you should assess your entire supply chain, it’s often best to start small, focussed on key areas, to generate some initial improvements and wins that will fund future assessments.
  2. Examine the ongoing challenges in your business model.
    Document how information, materials, and financials flow through the organization and review the metrics that are being used to evaluate effectiveness. This will help to reveal the challenges.
  3. Identify key issues impacting performance and perform a root-cause analysis.
    Also be sure to compare the company’s existing processes to industry best practices. This will help you zero in on the real improvement opportunities.
  4. Identify and prioritize opportunities.
    Determine the potential business impact of each opportunity and the relative ease with which they can be realized. Then select the most valuable ones and start with those.
  5. Develop a solutions roadmap.
    Once you’ve identified the appropriate improvements, develop a roadmap that outlines the project plan, estimated timelines, and expected costs. And follow through!

Still great advice, and advice every Supply Management organization should take.