Transforming your Business through Supply Chain Excellence
You may have heard the term “Operational Excellence” this term has been used to refocus a business when cost, lead time, quality or any other operational function was not meeting specific goals. It was also used as a motivation for operations that performed well in spite of the external tough economic times.
Supply chain excellence (SCE) is not much different. The goal of supply chain excellence is to focus the organization on reducing inventory, lead-times along with improved planning cycles and inventory turns. SCE is also improving inventory accuracy and visibility. When an organization is focused SCE they have to include the extended supply chain, meaning they have to look beyond just the four walls of their business. This requires you to look beyond your tier one supplier. An example is looking at a steel mill that supplies steel to the service center that process’ the steel that you eventually purchase for your manufacturing needs.
Understanding this extended supply chain will enable you to begin to your journey of supply chain excellence.
“For every action there is a reaction”
In my own experience when cutting inventory without fully understanding the impact on the extended supply chain resulted in major debacle. The outcome was lost production and ultimately lost sales because we failed to fully understand the extended supply chain and the impact on our business.
“Fear of Proper Planning”
Do not be afraid to include your supply partners in your forecast planning. They have insight into areas that you may have never considered.
“21st century planning”
In this day and age the resources that are available for proper planning give any organization no excuse for poor planning. The Sales & Operations Planning is a process of bringing together a cross functional team that has visibility across the entire organization in meeting customer demand in the most efficient and profitable way. This process is nothing new, but will still have organizations planning their day to day operations in silos. This type of planning gives no visibility across the organization or the extended supply chain.
“Voice of the Customer”
Who is listing to the customer? We sometimes overlook the obvious that the customer is part of the extended supply chain. They are the reason why a company exists but we so often treat them as if they exist because of us. The customer can provide vital data that will help reduce inventory and lead time.
“Win Win”
The approach for both suppliers and customers should always be a “win win” opportunity. It’s amazing the attention you get when there is gain to be shared for both sides.
You may have heard the term “Operational Excellence” this term has been used to refocus a business when cost, lead time, quality or any other operational function was not meeting specific goals. It was also used as a motivation for operations that performed well in spite of the external tough economic times.
Supply chain excellence (SCE) is not much different. The goal of supply chain excellence is to focus the organization on reducing inventory, lead-times along with improved planning cycles and inventory turns. SCE is also improving inventory accuracy and visibility. When an organization is focused SCE they have to include the extended supply chain, meaning they have to look beyond just the four walls of their business. This requires you to look beyond your tier one supplier. An example is looking at a steel mill that supplies steel to the service center that process’ the steel that you eventually purchase for your manufacturing needs.
Understanding this extended supply chain will enable you to begin to your journey of supply chain excellence.
“For every action there is a reaction”
In my own experience when cutting inventory without fully understanding the impact on the extended supply chain resulted in major debacle. The outcome was lost production and ultimately lost sales because we failed to fully understand the extended supply chain and the impact on our business.
“Fear of Proper Planning”
Do not be afraid to include your supply partners in your forecast planning. They have insight into areas that you may have never considered.
“21st century planning”
In this day and age the resources that are available for proper planning give any organization no excuse for poor planning. The Sales & Operations Planning is a process of bringing together a cross functional team that has visibility across the entire organization in meeting customer demand in the most efficient and profitable way. This process is nothing new, but will still have organizations planning their day to day operations in silos. This type of planning gives no visibility across the organization or the extended supply chain.
“Voice of the Customer”
Who is listing to the customer? We sometimes overlook the obvious that the customer is part of the extended supply chain. They are the reason why a company exists but we so often treat them as if they exist because of us. The customer can provide vital data that will help reduce inventory and lead time.
“Win Win”
The approach for both suppliers and customers should always be a “win win” opportunity. It’s amazing the attention you get when there is gain to be shared for both sides.
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