Are your company’s supply chains leading or lagging?
Don’t have the cost or asset efficiency answers to this question? Then you are probably not truly in control of your company’s supply chain performance. At the highest level managing supply chains starts with understanding how well you perform and developing strategic initiatives to improve or maintain supply chain performance.
Many executives ask us how to start the process of making strategic investments in supply chain. One answer is to show how you perform in comparison to your competitors and peers, and your trends versus industry trends. Benchmarking your financials is not difficult and PCG Benchmarks can provide you you with the first insights. Continue reading
People, Process, and Technology – I’ve heard those stated over and over from a ‘framework’ point of view as the essentials of good supply chain management. I think it’s very incomplete. I’ve worked with companies with great people – dedicated 10- 20- and 30- year professionals in their supply chain roles. Processes, while not meticulously documented and automated, were well-understood, repeatable, and performed to expectation. A company may have great ERP, MRP, and other systems to have high fairly automated environments. Yet, customers are defecting. Inventory is out of control perhaps – both too much and too little, a wonderful paradox. Costs are escalating faster than inflation.
When I talk to these organizations, what is strikingly evident is that they are very internally focused – I did my process at the right time, our ERP has great capabilities, my team is very experienced in our product, we have a six-sigma team that’s constantly looking for improvements. The gotcha is when I ask about end-to-end supply chain performance, and market expectation – the blank look. Let me give you Joe’s five pillars of supply chain management – Markets, Metrics, People, Process, and Technology. Continue reading
I had to create a communication package once for the CIO, CEO, and President of HP on difficulties in their “going direct” supply chain process. Perhaps it was my Caltech Science background, or having a lot of raw data, but I came up with what I thought was a wonderful, lucid, though 400-page, presentation. My SC and IT team had been through the HP-Compaq merger, and we had reams of analysis of both companies, and likewise on the four or five attempts by both companies to try to leverage indirect fulfillment supply chains for direct sales (hint: it doesn’t work well). I started walking Bob Napier, CIO at the time of HP (Bob is no longer with us), through the presentation. He was an old Navy guy with a deep voice like dark polished wood, and he filled his office with a booming laugh. “Oh Joe. It’s the first time.” Continue reading
As I speak to supply chain audiences, I focus on key messages that are important, but sometimes forget where they came from. One key message I focus on is that the best supply chain organizations are not “managing by project” – they consider that a type of management failure. Continue reading
After speaking at a Six Sigma conference I was asked what my definition of what supply chain management is and how it differs from Lean Six Sigma. The topic of my presentation was how to identify important change programs. I am not sure what exact wording I used but I must have first stated that I am not a Lean Six Sigma expert, only a Six Sigma customer, but my observation was that Six Sigma did not seem to use standards. My definition must have included process measurement, modeling and change planning.
For me supply chain management started 5 years ago with a request to join a group of individuals traveling to Minneapolis who were going to be trained in SCOR. The training experience was both positive and negative. The positive aspect was and remains the standard definitions for processes and metrics. As a former reporting manager I have spend many meetings explaining why we adopted a certain set of metrics and then sat through the arguments of what the definition should be according to such-and-such. Today whenever somebody asks the question how to measure an aspect of the supply chain the response is simple: Continue reading