supplychaincity

Introduction to Benchmarking

2009-05-19T13:52:00.001-07:00

For those looking to get to grips with Benchmarking - check out the hampreston.com blog which has got a series of benchmarking articles covering the topic - including getting best practice through benchmarking

There's lots of application for supply chain professionals with regard to benchmarking - especially understanding how your peers are leveraging technology to develop efficiencies.

Thanks to valuestreamguru on twitter for the link.

Benchmarking Introduction

2009-03-27T10:38:00.000-07:00

Benchmarking is a really good opportunity to compare practices with like minded organizations - knowing how other companies perform can help promote improvements in your own - personally I've seen how technology like Purchase to Payment or other B2B systems have really taken off as a result of benchmarking - seeing how other companies leverage technology is often a great launchpad for how such processes can be used in your own company.

For more information check out this introduction to benchmarking which includes a benchmarking ppt presentation

Make a radar chart

2009-03-23T23:45:00.000-07:00

Over at Valuestreamguru.com they've got a example post of how to use a excel radar chart for visual management - I've often used radar charts when looking at supplier performance as it's a great way of looking at how suppliers are performing within thier commodity or peer community - so go check it out!

Value Stream Squid

2008-11-15T13:30:00.000-08:00

Valuestreamguru.com, a site focusing on Value Stream Mapping and Kaizen has launched it's own Squidoo lens - featuring the latest news and video's on the world of lean the lens can be found at www.squidoo/valuestreamgurusquid

Value stream mappng toolset

2008-10-07T12:44:00.001-07:00

Value stream mapping is becoming an ever increasingly popular tool in mapping out information and material flow within the supply chain.

I've seen it used a number of times to trap inventory bottlenecks or to analyse and plan reduction in leadtimes - its easy enough to learn and can produce some interesting results.

An interesting thing to learn though is that there is actually seven value stream mapping tools - each designed to help understand the flow within the business - not sure whether they can all be applied to supply chain but interesting enough to warrant some further research.

Kaizen information portal

2008-09-28T13:11:00.001-07:00

For those interested in Kaizen - Valuestreamguru has launched thier Kaizen Hub, a portal bringing together information on Kaizen, Lean Manufacturing and Lean into one helpful page.

A great idea for anyone starting out on Kaizen and looking for a jumping off page - go take a look!

Business Effeciency in the Supply Chain

2008-04-12T08:25:00.000-07:00

We all know that one of the key things for any organization is that it runs effeciently - Business effeciency faciliates more products for less cost. Effeciency is a key indicator for supply chain as it demonstrates effective management of the supplying organization - and can also foster lower levels of stock and resource - and by default shorter leadtimes.

To read about the relevancy of effeciency and its impact on inventory - check out this great article from RM Donavon: http://www.idii.com/wp/donovan_inv_eff.pdf

5 tips to improve your business

2007-12-16T12:34:00.001-08:00

Sometimes its easy to forget that all businesses can be improved. As supply chain proffessionals we're kept busy whether managing complex assetts and inventory or chasing OEM's on the other side of the world for price and availability. To assist http://www.leanlaunchpad.com/ has put together its list of 5 lean tips to superpower your business . Quick easy tips that can make a difference.

List of online resources and tools on Materials Management

2007-10-06T10:32:00.000-07:00

Given the importance of materials management on supply chain we thought we'd begin to collate a list of some online resources on the subject.

This is something we'll continue to add to and if there's any you'd like us to include- use the comments at the bottom of the article.

Supplier Associations

2007-09-15T05:22:00.001-07:00

Supplier collaboration is all the rage these days. Modern supply chain is all about extending the sphere of influence and de-risking the process. For many organizations this has been acheived through supplier associations - groups of suppliers getting together for mutual benefit. Over at http://www.strategysquared.com/ they've investigated the subject tracing it's routes from Japanese manufacturing and taken a look at it's benefits and problems - For more information check out their article on Supplier Associations, benfits through supplier collaboration

Safety Stock as a result of servicare levels

2007-07-10T12:29:00.000-07:00

I was at a seminar the other day looking at some of the new software tools for the supply chain industry. One prominent factor accross the peice was just how prominent service levels and customer focus had become.

Of particular note were some discussions on safety stock. For senior managers safety stock has always been a bugbear - indicative of supply chain failure and a gobbler up of cash. While using service levels to lower safety stocks is nothing new - this has now become embedded within software. Providers like Barloworld Logistics have added service levels into thier software as a variable that can be readily adapted to suite financial needs - the customer leading the supply chain - whatever next!

Measuring your Carbon Footprint

2007-07-06T13:04:00.001-07:00

Following on from the last post - for those wishing to analyse their carbon footprint - try the excellent http://www.logisticsbureau.com.au/supply_chain_carbon_footprint_emissions_analysis.htm

Supply Chain's Carbon Footprint

2007-07-06T11:18:00.001-07:00

With the live earth event taking place tomorrow (www.liveearth.org/) it will do us all good in our busy purchasing lives to take a minute and consider the environmental impact our purchasing has - in today's world of "cost down" chasing commodities requiring global transport and questionable manufacturing techniques - we don't often think of the impact we as purchasing professionals have let alone consider our businesses environmental strategy.

Maybe now is a good time to start.....

Evolving supply chain.

2007-07-05T13:45:00.000-07:00

As businesses continue to focus in on value add activity and "core" tasks - supply chain activity continues to be put under the microscope.

The old world view of Supply chains being made up of hierarchical bureaucratic organizations pushing paper is one that is hard to shake off - many businesses have opted to outsource tasks - for example warehouse management to 3pl companies - purchasing execution has also been targeted where it can't be automated - and as elements of supply chain activity continue to be chewed on by business improvement teams what's does the future bode for supply chain professionals.

Strategic management of suppliers will loom large with many workers - as the focus continues to shift from transaction management through to risk management - partnering and collaboration. Workers will need to evolve and develop new skills - technology will have a large part to play in this - the same software which has helped in execution automation will provide tools for relationship management and supply chain analysis as knowledge management becomes key.

One things for sure - the world of supply chain is evolving - tomorrows jobs will not look like todays!

Supply Chain goes tech crazy as the Supply Chain Managment Association Opens in Second Life

2007-07-03T11:07:00.000-07:00

Personally I just cant get secondlife - having extoed the virtues of the web socially and professionaly for the last 10 years I know I should get it - but it leaves me a little cold - however each to thier own -

Anyhow - the Supply Chain Management Association (part of Mitchigan University) has opened up on Second life. While it doesnt offer a great deal yet their second life location is likely to offer more in the coming months and offers a virtual location for supply chain professionals to hang out.

More here ---->http://supplychainsrock.blogspot.com/2007/06/supply-chain-managment-association.html

Value Stream Mapping resource center launched at Bizbodz.com

2007-05-06T08:05:00.000-07:00

Value stream mapping is increasingly being used in improvement programs and offers a significant improvement over traditional process mapping as information, material and processes are all displayed on the one map.

www.Bizbodz.com has launched it's own resource center for value stream mapping including, tutorials, explanation on benefits and case studies. Click the link to find out more

Value stream mapping

2007-04-03T05:10:00.000-07:00

Value stream mapping can be a really usefull tool in leaning your organisations process www.bizbodz.com has a usefull series on how to do value stream mapping go check it out!

Dots, Dashes, Spaces – The art of the Part Number

2007-01-19T12:50:00.000-08:00

Ahhh…part numbers such little inconsequential things – such a pain to get right. A colleague of mine is working in an organisation which is about to implement a new supply chain IT system – they have the joy of being part of a merger which is pitching several diverse business units together – they’ve taken the view to centralise their Supply Chain and my friend is part of the process of deciding how their new system will operate.

He’s got a real headache at the moment each of the businesses being merged runs it’s own IT solution and they all have different rules with regards to Part Numbers – He’s in charge of migrating inventory data and defining policies - he’s found Part Numbers like the following (these are all based on a theme)

123XYAZ Qty 4 Packets

123XYAZ.42

123XYAZ 42

123XYAZ*not to be issued*

123 XY AZ-42

Etc….

Guess what – there all the same item – and most numbers had stock associated with them! – the parent organisations had lax control over who entered part numbers within the IT system and as you’d expect over time – all hell broke loose!

So what’s the answer? – Well they’ve taken the right step in defining a policy on data entry – they’ve also agreed to limit who can create part numbers and put a formal process behind it – but ultimately there in for some fun discussions and a lot of work in rationalising these (there’s several hundred thousand part numbers in the combined systems) – although actual unique parts will be much lower than this….so what’s the moral in this tale?…..on the one hand it could be to formalise the process and don’t let this happen in the first place…on the other – the lesson in this is don’t get involved in supply chain mergers!

Managing Supply chain risk

2007-01-19T12:49:00.000-08:00

The other day we were investigating an inventory forecasting tool – we’d invited a solutions company to present and the salesman was showcasing his product – during this he put the spin that this application had other attributes in that it was not just for inventory but could be used generally within the business to help model the business activity over time and help us spot and reduce business risks..

A good point well made we though - risk management within business is often seen as a bit of a dark art and sometimes (incorrectly) overlooked or incorrectly overstated (CEO’s facing on the big headline risks rather than the small ones that can really bite).

Within the world of supply chain risk management is particularly pertinent as the relationship between supply chain and the end customer is tightly bound. Take the example of a stock out – this I’m sure happens in most businesses every week – however this small problem - a failure to supply goods – can not only result in inventory problems or manufacturing delays but can have a direct relationship with lost sales and lost customers. Therefore not only is the challenge identifying the risk but understanding the possible outcomes when that risk is realized.

As we all know, the world of supply chain is complex with many stakeholders and processes – the risks within it are many – for example there are risks associated with suppliers – they may go out of business, there are financial risks – e.g. fluctuating exchange rates – there are “front page” risks such as Geo-Political and there are technical risks such as Obsolescence.

Perversely in recent years we have seen supply chains through leaning activity increase their exposure to some risks – in years gone by we have seen how many organisations have utilised their “fat” as a risk management mechanism – overstocking is a prime example of that. Lean organizations can suffer greatly because they have reduced the buffers that their organisations once – had – this isn’t necessarily a bad thing but as with most business issues one of the key mitigations for risk is having an appropriate strategy – think of project management disciplines – how many businesses have a risk management (and mitigation) strategy.

Going back to our IT sales guy - technology can of course offer some assistance it can help model what if’s and raise awareness but alone it isn’t the answer – risk management takes strategic thinking and management information to ensure that the right decisions are made.

So what does this mean for Supply Chain execs? Well ensuring that there is a level of awareness within the organisation is a must for one - for example – take your supplier profile – are there any small niche suppliers that you rely heavily on? What’s there financial position – how much do they rely on you? What’s your spend by currency? How would a significant change to exchange rates affect you? Overall Risk and Risk Mitigation is something we should all preach – awareness and avoidance – build it into our business culture and constantly monitor it.

Gibson HD 6X Innovation vs Supply Chain

2007-01-17T12:45:00.000-08:00

Happening right now in Anaheim is the NAMM show (http://www.thenammshow.com/). NAMM is an internationally renowned music industry trade show for music manufacturers. No doubt NAMM will showcase many exciting new products from those presenting at the show, some of those products will probably represent use of the latest cutting edge technology and product innovation. While innovation is what keeps businesses secure in the long term, It’s worthwhile considering the impact on the supply chain of new products, especially those showing a significant level of design change.

A good case study for this is the new Gibson HD 6X Pro which will be shown off at NAMM. Gibson claim that this is the most revolutionary leap forward in guitar manufacturing in 50 years. Gibson (www.gibson.com) have been making guitars for over 50 years and have numerous manufacturing plants dotted around the world and are one of the most renowned guitar manufacturers. If you look at the industry itself, the guitar itself has more or less remained fairly static for many years with the basic premise consisting of a small set of commodities – i.e. wood, electrical components, plastics, chrome etc all coming together on the production line or craftshop to form the final product. With increasing competition (from the far east) Gibson has a need to differentiate itself.

Gibson’s new HD 6X Pro guitar mixes traditional guitar manufacturing “hand oiled mahogany neck, smooth frets, classic humbuckers for traditional tone” with ultra modern technology which allows the output (which Gibson call Hex output) of each string to be digitally processed as Gibson state on the website, “Imagine using six guitar amplifiers – one for each string – or recording six strings individually onto a computer”.

The Gibson HD6X with it’s use of modern electronics is certainly innovative with the way it embraces modern technology. This builds on a shift within the industry that has in recent years seen manufacturers like Line 6 enter the market which was once relatively low technology and dragging it into the modern era of consumer electronics. The Line 6 Variax can impersonate the sound characteristics of a multitude of guitars and has, unsurpringly, some complex electronics and materials inside.

From a components point of view Gibson have added a number of new components to the traditional make up including new controls, pickups, electronics, outputs. The HD6X also ships with it’s own special set of strings and therefore there is a supply chain dependency for through life support of the product.

Clearly then products of this type indicate somewhat of a departure from the usual fare. But what does this mean to the likes of Gibson’s supply chain. Well, as products get more innovative, supply chains need to evolve to keep pace. First off new components may need new suppliers, new storage conditions, different skill sets and technical know how within it’s purchasing community. Through life support of the product may radically change resulting in new repair schemes, different spares requirements etc. A radical change in products may need a quantum shift in the company – suppliers in new geographical areas. Innovations can mean a requirement for whole new skill set within the purchasing community – take Gibson’s shift from relatively old school commodities to high end electronics. Without a doubt it’s supply chain has had to adapt to compensate for this shift.

Clearly the biggest assistance that Supply Chain can get is advanced warning and time to react. The musical instrument industry is not unique with innovating it’s products but a substantial innovation (or complete re-design) can wreak havoc with existing supply chains, sometimes requiring completely new complimenting supply chain strategies. The old adage therefore of design and Supply chain requiring a close working relationship remain truer today than it’s ever been. Given the change that product innovation can inflict on the supply chain – radical innovation can be a risky road to follow - but the rewards of being a successful early adopter can reap huge rewards.

Supply-Chain World 2007

2007-01-08T07:37:00.000-08:00

A date for your diary if your reading in the US.

The Supply-Chain World – North America 2007 Conference & Exposition is happening from from 19-21 March, 2007.

It's always great to go to these industry get togethers - do some networking and finding out what's happeing in the world of supplychain

Supply-chain.org states that "The primary focus of the 2007 SCW program regards needs of supply chain managers, their suppliers and customers. Keynote speakers include Ed Oakley, chairman & CEO of Enlightened Leadership Solutions, Inc., who will discuss “Mastering Supply Chain Management: Balancing the Hard and Soft.”

The conference will also feature new training courses based around the SCOR model.

Check out http://www.supply-chain.org/cs/root/news_press/view_news_release?pressrelease.id=90 for more details

Visual Supply Chain Metrics

2007-01-02T06:48:00.000-08:00

Following on from our previous post on Supply Chain metrics it’s worth discussing the use of visual metrics in the workplace.

In today’s age of modern computer systems and technology it’s surprising sometimes to see how few organisations have a handle on how their business is doing – it’s all the more surprising to see the affect this has on desk level operatives such as buyers or warehouse staff.

It’s not radical to assume that if people don’t have clear objectives and are knowledgable about how the business is performing that they’ll continue to work as they always do.

So how do you compensate for this – well one area that we recommend to our clients is that the business grasps the use of visual management and information sharing with both hands, performance management should become part of the organisational culture. There are a variety of methods in doing this.

The more technically savy organisations may make this “business intelligence” part of their organisations intranet – encorporating hierachical views of the companies data and measuring this against set targets. Some businesses take the step of consolidating this data and emailing it out as a monthly brief to all staff. How it’s presented isn’t necessarily too important the ability for staff to tap into the management reports is though.

One other common method is the use of management boards – we deploy these in some organisations and they tend to be localised (to specific departments). We just use common garden white boards where we fix the monthly management reports to. We then run short (but sharp) management briefings with staff regularly (we run a 15 minute business brief on a Monday) to discuss the organisations performance (eg, output figures, performance against budget etc) and the coming targets for the week.

Where the business is underperforming these sessions represent an ideal time to discuss how the situation can be righted – we run in parallel to the reports and actions list where we list owners and actions of specific tasks that have been generated by the Visual Supply Chain Metrics. Our “management white board” is just past the entrance to the office – you can’t miss it and it’s visible too all. The key output from this is that everyone shares in the departments performance and everyone knows the departmental objectives.

The old adage “you can’t manage what you can’t see” is truer now than it’s ever been – sure Supply Chain metrics are important – they help you see what’s happening – but it doesn’t stop there – so many business produce a Business Intelligence monthly pack and then file it away!

When it comes to supply chain metrics we say!

Display them
Share them across departments (be proud of your performance)
Discuss them
Review them

Supply Chain Collaboration Systems

2007-01-02T06:47:00.000-08:00

One of the buzz words from Supply Chain systems resellers is the joined up enterprise – the likes of SAP, JDE, Microsoft all exude the benefits of joining your supply chain Collaborating with both internal and external customer and suppliers.

Microsoft state of it’s AX range “Microsoft Dynamics AX brings together people, processes, and technologies wherever they are located worldwide” (http://www.microsoft.com/dynamics/ax/product/overview.mspx)

The technology is nothing new and the ability to share data with suppliers has been around for many years now (think EDI) – the internet has opened this up tremendously and now you have the ability to tender for your requirements, track your procurement transactions – pay your invoices on-line to name just a few processes that were handled manually ten years ago.

Industry have certainly embraced the principle – but how many have integrated deeply is up for debate - We’d love to start a discussion on collaboration and how you’ve integrate with your suppliers and partners and what benefits you’ve realised.

Is there anyone out there who’s being really innovative with their collaboration – any ideas of best practice – comment away!

Procurement Training

2007-01-02T06:46:00.000-08:00

One thing we often come across is businesses looking for training for Procurement staff – clearly there are some good organisations out there that provide professional development (www.cips.org). However for smaller organisations the costs of putting staff through professional courses can sometimes seem a little daunting (often they resort to buying in this knowledge by stating specific educational qualifications on job vacancies).

However for many organisations they won’t want everyone trained up to this level – but will expect some procurement training focussing on specific areas to improve staff competency.

Commonly Procurement Training focuses on a combination of practical training and more formal (often longer term) developmental.

CIPS have developed a purchasers toolkit which covers the following attributes:

Purchasing
Negotiation
Relationship Management
Influencing Skills
Legal
Contract Management
Stores Management

For many this represents an ideal mix of what procurement staff need to know – many will wish to tailor this mix according to needs. Often as not its’ the Negotiation and Legal/Contract Management that tends to be the weak points in many organisations. What about your company – how do they train staff?

Procurement Savings

2006-12-21T07:56:00.001-08:00

A few years ago I was interim managing a procurement department in a medium sized organisation – the team had around 40 buyers (a mix of tactical and strategic buyers across a huge range of commodities).

The number one concern of the management team above me was – “What savings can the procurement team make”. Almost every day the drive was cost down.

All well and good and whilst some may argue that this isn’t modern thinking and is focusing just on the end result – it is a common theme in a great many organisations - it got me thinking about what a saving actually was.

You’d be surprised how complicated this got and how many meetings we had defining a saving. Let me shed some light on our discussions.

Finance – “A saving is only a saving if we see it on the bottom line” – i.e. my Pen cost $1 last year and 90 cents this year – that’s a 10 cent saving which I see in the bills I pay (it’s realised when it hits my P&L) – that’s all well and good I hear you cry but what if the people who manage the stationery now order extra goods with the difference – it’s still a saving yes but financially we’re in the same position as we were (albeit we have more inventory) as far as the bottom line is concerned where neutral (where we were) – no fiscal saving against budget.
What if my saving is on Future expenditure – one of our buyers did a fantastic deal with a major OEM with a significant reduction in cost across their range – great – the fact was it was unlikely that we’d procure that suppliers items in the next 12 months – so reduction in prices but no actual savings made.
Another buyer managed to reduce the acquisition cost of an item that ran into tens of thousands of dollars – fantastic – savings made – but wait a minute the contract with the customer that requires those goods is cost plus – oops – materials saving and margin reduction
A significant assembly in our manufacturing plant is failing – procurement pull out all the stops get the replacements in (pay extra for fast delivery and a premium for the supplier to divert the stock to us.) Extra money spent on Procurement and we’re above budget – but savings made when we look at the cost of non-supply – (outage in manufacture).
A particular range of equipment that we manufacture has a particular widget – we negotiate a new deal with the supplier of said widget and reduce the overall cost of production – problems arise however when we analyse the financial budget for the production and there was no detailed bill of materials (BOM) budget and therefore the financial forecast was a “finger in the air” – yes we made savings but against what – the original forecasted expenditure was flawed so we have nothing to baseline ourselves against and the difference in cost is lost in the accounts.

The moral of this tale is that when your looking to make procurement savings you need to

a) Define what a saving is/means to your organisation
Ensure everyone understand the rules of the game and what a saving is and when it is realised. Ensure that where people spend savings (as in the stationery example above) that adequate justification is given e.g. extra spend mitigate risk further down the line
b) Work against a defined (and costed) Bill of Materials – that way any savings (or increases) are easily identified.
b) Obtain sign off from the Project Manager and Finance when savings are made
Introduce a savings pro-forma where significant savings are identified and “signed off” by stakeholders – this then represents formal acceptance of your hard work.

Whilst there is so much more than “cost down” that Procurement can deliver – it’ll probably always be a significant part of Procurement activity so we hope you take heart in our cautionary tale and ensure that your hardwork is recognised.

RFID tags in Supply Chain

2006-12-21T06:55:00.000-08:00

In this article we’d like to explore how widespread RFID usage is within supply chain around the world. The world’s big retail players seem to have embraced RFID over the last few years – but we’d love to know how this has flowed down and what readers experiences of RFID has been.

However, for those that don’t know – let’s look at the basics.

RFID Basics

Radio Frequency Identification or as it’s more commonly known asRFID is a method of identifying items through the use of electronic tags or transponders. These RFID Tags fall into two camps – passive (i.e. non powered) or active (powered). Even the most basic RFID tags can contain EEPROM data which can be used to store pertinent information on the item. These days RFID tags can be added to most things (clothing, components, engineering equipment to name a few.).

RFID Benefits

The benefits or using RFID within the supply chain are many – using them to help the management of inventory can result in fewer data input errors, automatic stock reconciliation etc etc.

A few years ago RFID was being bandied around as a panacea for Supply Chain a curer or all ills –

Some originally saw RFID as a barcode ‘killer – in our experience this is still to happen – and whilst the likes of Wall-Mart in the US, Marks and Spencers in the UK are two of a raft of retailers who have embraced RFID – we think it’s still to flow down to the small-medium sized organisation.

This is probably due to two factors – imagined complexity and cost – RFID is still thought of a tool for the big boys – small organisations may not have the staff who can capitalise on it and resellers and consultancies seem not to target smaller organisations – there is also a perceived barrier around cost – with many organisations thinking that RFID is expensive to implement.

So what are your experiences with RFID in the Supply Chain – how do you use it – how has it changed your business for the better – have you had any problems in it’s use– we’d love to hear about it.

Managing your supply chain with Microsoft Axapta

2006-12-21T06:24:00.000-08:00

One of the products that has been under our radar of late is Microsoft Axapta (or Microsoft Dyamics AX for it’s proper title).

Microsoft Axapta is a a multilanguage, multicurrency enterprise resource planning (ERP) solution which Microsoft says it “automates sales and purchasing and streamlines intercompany operations. And because it was built for the Internet, your sales team can access, view, and update customer and company information anytime, anywhere.”

Designed for mid size to large companies it has a number of modules of use to supply chain professionals and aims to integrate the supply chain Enterprise to Enterprise across both company and geographical boundries.

Modules cover the basics of Warehouse Management, Procurement, Trade and Sales.

Given the glut of ERP systems in the marketplace – we’d love to hear comments on this one how’s it fare? Good points and bad – we’d like to hear it.

Supply Chain metrics

2006-12-21T05:40:00.000-08:00

One of the key elements of any business today is it’s reliance on metrics and KPI’s ( Key Performance indicators) – gone is the time when the only indicator was profit and loss – today’s business relies on a myriad of measures to ensure it’s business remains on track.

This is especially true within Supply Chain. Supply chain benefits (usually) from producing a wealth of data in it’s day to day transactions – think about purchase orders being raised, invoices being paid, stock being issues etc. Supply chain therefore should be able to produce some compelling analysis of it’s business – but for many the questions is what to measure.

Having worked within Supply chain for many years I don’t think that there is a definitive answer – Metrics are often aligned to the industry sector that the business operates from. And different businesses weight different activies differently. Any metrics should usually filter up towards business targets so you'll want to make sure that your analysis supports this.

However in my opinion you can often distill supply chain metrics down to a number of core constituents. The following 3 supply chain metrics are the basic raw materials for procurement that we tend to start off with – there are plenty of others out there but this should get you thinking.

1/ Number of Suppliers

One of the key elements for any organisation are the suppliers that they are transacting with – when working with clients the first port of call is to look at the Supplier profile – i.e. take a period say an accounting year – then list all the suppliers that were transacted with (this can be taken from either the purchase ledger or order book)

2/ Spend Profile

The next step is to add in the financials - Add in the money that was spent with each supplier. For later analysis we throw in a category now that could be commodity based (this is what we usually use) or geographical – something that’s relevant to your business. Once this is complete you then have something tangible to look at - clients are often suprised by how many suppliers they have for commodities such as logistics or stationery -

3/ Supplier performance

Lastly – try to analyse the suppliers performance – we usually look at Supplier Schedule Adherance – we measure that (albeit crudely) as “did my supplier deliver on or before the date I requested”. Now I now that for some early delivery represents a penalty but we tend to start out with the crude measure and go from there.

Once you've got those 3 down - think of some targets that you want - for example do you want to rationalise your supply base? Do you need your schedule adherance improving? Linking targets to analysis can often form the basis of improvment plans.

Over to you – we’d love to know what supply chain metrics that you use.

Welcome to supply chain city

2006-12-21T05:16:00.000-08:00

Hi - welcome to our new blog - here at supply chain city we aim to cover the hot topics of supply chain and procurement - we'd love to hear from you as well - so don't forget to contribute and comment.

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A cookie is a small data file that certain web sites write to your hard drive when you visit them. A cookie file can contain information such as a user ID that the site uses to track the pages you've visited. But the only personal information a cookie can contain is information you supply yourself. A cookie can't read data off your hard disk or read cookie files created by other sites. We may use cookies when you register for certain features on our site and our advertisers may also uses cookies to manage their activities.

Cookies can be turned off if required

If you've set your browser to warn you before accepting cookies, you will receive the warning message with each cookie. You can refuse cookies by turning them off in your browser. You do not need to have cookies turned on to use our site, however some features of the site may not function fully without.