Tag Archives: metrics

Financial vs Operational Metrics

There are hundreds of supply chain metrics, many of them ‘standard’ to a degree – order cycle time is a pretty standard metric, though you can tweak the “when” for when the order arrives as well as when the delivery is handed the customer, but most serious supply chain professionals agree on major definitions.

Some organizations use far too many metrics – I recall a Supply Chain re-engineering and ERP implementation I was involved with, which had with 20 operational reports, only two of which were used. The cost to develop was amazing. The flip side is organizations that attempt to guide operations exclusively with financial metrics. An example may be to look exclusively at either total supply chain cost, or perhaps inventory. If you are organized to look at supply chain by P&L only, or worse, by general ledger line, it makes perfect sense to simply set up a metric, and report and try to manage and optimize the supply chain by that financial view.  Continue reading

Pillars of Supply Chain Management

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

Metrics Always Win

Over the past two weeks I have had the pleasure of meeting with senior executives from a variety of companies in training situations where we could talk freely and discover opportunities within their businesses for improving their supply chains. SCC trainings—particularly in-house private trainings – take a practical, hands-on focus to supply chain improvement. Managers frequently leave the trainings with specific ideas and improvement programs laid out and ready to go. Continue reading

Making a List, Checking it Twice

I am frequently asked, “What is the most important thing…” in performing a particular Supply Chain Transformation program, or in different case studies. My answers vary: to wrestle with Tolstoy, “all good programs are the same; all bad programs are bad in different ways.” Over several years, my team adapted a checklist that identifies which Supply Chain Transformation programs will be successful—which corresponded to major modes of management of change: Continue reading

A Word For Your Sponsor

I had a long conversation with an Asian business team not long ago that were developing Supply Chain functions in their company, and we had a long discussion about critical success factors for enterprise-scale Supply Chain. The one I always bring up is “good sponsorship”. But they wanted to know more, and we discussed it much further, and it led me to several insights to share. Continue reading

Unsolved Problems

I have a certain fondness for reading about mathematics. One topic that I find especially interesting concerns the “great unsolved problems” in mathematics. A good example is Fermat’s Last Theorem. Fermat conjectured that there are no whole-number solutions for the equation

an + bn = cn,

where a, b, c, and n are all integers.[1] I don’t lay awake at night thinking about such problems, but it is interesting to read about the various strategies mathematicians have attempted as they struggled to solve these problems.

I think there are also a handful of “great unsolved problems” in Supply Chain process management which are very simple to state, painfully difficult to solve, and, if completely solved, would radically change the entire field. Continue reading