by Sean Elliffe
How do we know we have got a world-class supply chain? There are as many arguments as to what constitutes “world-class” as there are detractors who would question if such a thing even exists. In this modern era, there are significant complexity challenges that require us to consider multiple business dynamics, not least of which are the realities of:
Within this environment of complexity, there are also many indicators of success that provide insight as to whether or not we are on the right track. These include:
Getting to this end state requires not only that we measure ourselves but also that we build strong interdependent relationships across the extended supply chain. The net result is a competitive edge needed to drive successful and sustainable businesses.
BUILDING COMPETITIVE EDGE THROUGH INTERDEPENDENT RELATIONSHIPS
Competitive edge is something all companies strive for as part of building their so-called “world-class supply chain.” From a high-level definition, this means having effective interdependent relationships between people, process and technology; and from our suppliers to our customers such that we are enabled to increase market value and drive down end-to-end supply chain costs. Core elements of effort in getting to that end state include:
But around each corner, many enemies that undermine our abilities to realize this interdependent focus are lurking. Three specific areas that have an unwanted negative impact are:
Uncertainty and lack of reliable data
Decision points / functional hand-offs
The underlying hypothesis from the above is that “bad data / information gets covered by inventory.” From a world-class perspective, our interest lies in optimizing opportunities that impact the bottom line. This means understanding the supply chain effort required to support improvements in sales, while also driving down costs. Figure 1 below provides some context as to focal points that make this a reality, including alignment with improved interdependent relationships that drive supply chain integration:
Figure 1: Opportunity to Impact the Bottom Line.
Becoming world-class requires that we focus on operational excellence and use all means at our disposal to ensure:
Put all this together, and the value opportunities to business become real:
Good luck, all — let’s get to world-class.Tags: inventory optimizaiton, Supply chain, supply chain integration