CHAIN MANAGEMENT

BENEFITS OF SUPPLY CHAIN MANAGEMENT The supply chain performance management framework is a powerful tool for enterprises to build efficient, responsive and agile supply chains that are managed and led by committed and well-informed managers and executives within the enterprise as well as partners. When executed effectively, the metrics framework can lead to significant benefits for a company. Alignment of supply chain metrics to overall corporate metrics and strategic objectives : There are instances of supply chain performance being driven by KPIs that do not accurately reflect what it would take for a CPG company to win in the marketplace. For example, if the primary KPI of a supply chain is to optimize on inventory turns, it could become overly focused on reducing inventory levels at all nodes of the supply chain. The result could be that either service levels or lead times could get compromised, resulting in a much more significant impact on corporate performance in the long run. The top-down approach recommended in this article helps derive and align supply chain KPIs to key corporate objectives like customer satisfaction, financial performance or operational excellence. Enhanced collaboration internally as well as with external business partners : A supply chain metrics framework that is meaningfully aligned to corporate goals and is suitably supported by cause-and-effect guided analysis enables internal business functions like sales, marketing, manufacturing, etc., as well as business partners like suppliers, third-party logistics providers, etc., to clearly understand their role in shaping the success of the CPG supply chain. This in turn improves the performance of both the company and its extended enterprise. Such an understanding also helps eliminate functional silos, creating a results-oriented, multi-functional, multi-partner team that is able to visualize and work towards a larger objective instead of focusing on individual or functional delivery. Increase in employee productivity at all levels : Automated and timely customized scorecards consisting of metrics relevant for each role/function/process within the supply chain significantly reduce time spent on data collection and collation. This "reclaimed" time can now be fruitfully spent on root cause analysis and making and executing well-timed decisions supported by reliable and accurate data. Greater commitment and ownership of metrics and targets : Many organizations establish supply chain metrics and their targets without ensuring an adequate feedback mechanism prior to finalization of metrics and targets from the owners of these metrics. This fails to create adequate ownership and a common shared objective. On the other hand, an S&OP-driven process that ensures collaboration and consensus on metrics and target-setting helps create greater commitment and objectivity in performance. To maximize the benefits of SCPM, such a framework needs to be supported by adequate review processes and an organizational climate that fosters collaboration and teamwork. Materials arrive just in time requiring minimum storage & re-handling The college runs with minimum administration overhead Supplier and logistics contracts are now optimised Staff & students enjoy Clean Bright well-equipped lecture theatres Students can rely on borrowing books from a well stocked library that has anticipated the demand Labs always have exactly the right equipment supplies & consumables According to AMR Research, supply chain organizations of large enterprises have on average more than 300 employees across business divisions and geographies. Building and leveraging the supply chain performance management framework to improve their productivity, ensuring greater collaboration internally and externally, and being able to provide visibility of their performance in the context of the overall corporate performance can create significant competitive advantage. With increasing focus on creating supply chain excellence, the supply chain performance management framework is an investment that can provide healthy returns in the long run. VISION AND MOTIVATION OF SUPPLY CHAIN MANAGEMENT It is the nature of an educational institution to always look for the ‘better way’. Following a visit to Japan in 1995 to observe the advanced methods used by Toyota, the vision of an efficient, waste-free supply chain began to form in the minds of some senior college personnel. They immediately recognised that SCM had the potential to deliver significant benefits to all the college stakeholders. It would take a further six years to fully realise the vision but, the seeds were sown: View ‘Value’ from the perspective of the Customer – our Students & Staff Eliminate all waste & non-value-add activities from the chain Capture demand data at point of use & use this to control the chain Use rigorous process analysis & improvement techniques to optimise the chain Integrate all key elements (links) of the chain, students, academic staff, service staff, service providers, suppliers, administrators & finance. Establish a steady continuous flow based on pull/demand Use automated systems to deliver Straight-Through-Processing(STP) wherever possible. Use data & metrics collected within the process to continuously refine the it. Features of the SCM framework Demand recording & demand prediction Students and Academic Staff Extensive knowledge base built up over several years. Close collaboration with our Service Providers including direct interfaces to Suppliers (domestic & global) and Logistics companies. Full end-to-end commercial fulfilment including contracts and finance Building on the Vision The college selected a DIY approach leveraging the dept of ability and creativity available in the college staff and students to construct the technology components required for a sophisticated SCM system. As well as delivering a world-class SCM framework, the college has developed a considerable expertise in the business and technology of SCM.