Supply chain keeps on evolving and organizations keep on experimenting with different solutions and permutations & combinations to improve its efficiency. There are a few activities that are widely regarded as the game-changer activities in supply chain as these have the potential to improve the effectiveness and efficiency of your supply chain and hence place your organization on growth path. I have tried to list down few of them as per my discussions with industry leaders and peers at different forums:
- The mandate for measurement: You can not improve what you don’t measure – this is a well known principle and in post recession world when performance management has become one of the key focus areas, the need for measuring and measuring right metrics has come to the fore like never before. First of all, we need to identify what all metrics are most important for us, then we need to iron the conflicts like inventory reduction is more important for me or order fill rate. These metrics needs to be prioritized and a calculated weightage needs to be attached to them before measuring
- Benchmark with the best: Measuring the metrics is fine but how much can you improve? Can you reach 100% forecast accuracy or 100% fill rate for that matter – ofcourse, not in most industries. So, what do we do, we need to define our targets and the easiest way is to look up to the best performing student in the class. Identify your best in class competition and benchmark your metrics against them. Attach a timeline and phases to the improvement program and do a regular monitoring of progress
- Collaborate: Let us stop talking about collaborating and leveraging each other’s expertise within the organization and start actually collaborating. The concept of collaborative planning, forecasting and replenishment is not a theory only so let us implement it in the organization. Today, as I said earlier in one of my articles that organizations do not compete, supply chains compete and these supply chain which run across the organizations, can not complete without active and transparent collaboration. We need to collaborate with our vendors, our customers and our internal people in multiple departments to bring more efficiency and ownership in the system
- Make your S&OP relatively independent of supply chain risks: Well, this may sound magical and hard to achieve but this can be achieved and yes, without building buffers in the system and increasing working capital. Few of the methods of doing this are by strategizing the distribution system, take tactical local decisions, build partnerships and develop contingency plans
- Reduce waste and variability: In other words, look for the opportunities wherever lean and six sigma can be deployed. Lean reduces waste and cycle time whereas six sigma focuses on reducing variability. These concepts are not new in manufacturing or supply chains but still deliver the best to results and we should never consider these out of fashion at least in today’s world. Please note that it is not that simple to reduce the number of product variants or sales channels but identify the real opportunities and act as per a well thought out plan
- Reduce time to market: Your product lifecycle management strategy is extremely important to manage complexity in conceptualizing, designing, prototyping and mass producing the new products. This includes minimizing finished product SKUs, minimizing components, and better management of products as they reach end of life and are retired as new products are brought on board. Companies should continuously perform SKU rationalizations to keep their product lines fresh and competitive
Have a relook at your supply chain strategies and check out if the above game changers are in place for your organization or you need to take certain actions to make sure that you are ready to fuel the growth in future.