Aligning Metrics to Strategy

Measuring your strategic goals against their value and the time, money and attention they need When we began our metrics discussion, we talked about how behaviors are too often dictated by metrics—and whether or not these behaviors actually “move the needle” for sustainable supply chain improvements. Mark Davidson’s blog about aligning metrics to larger goals and objectives covers this topic well. I’d like to go over what I find especially

It’s Time to Revisit Vendor Managed Inventory

A few decades ago, Vendor Managed Inventory (VMI) was a hot topic. Many manufacturers saw it as a way to reduce inventory levels and costs. If they could get their suppliers to maintain ownership of raw materials or subcontracted components until consumed, inventory levels would naturally drop—on paper anyway. Because they were giving most, or all of their business to one supplier, they were also in a position to negotiate

Distinctions Between Discrete and Process Manufacturing

Process manufacturing is different, distinct, and distinguishable from discrete manufacturing. Process manufacturing uses formulations versus discrete manufacturers use Bills of Materials (BOMs) and assembles along a routing. Process manufacturers blend a batch – often a literal recipe found in food and beverage manufacturing. Discrete manufacturers are typically ETO (engineer-to-order), which includes make-to-stock (MTS), make-to-order (MTO), and assemble-to-order (ATO) production facilities. Because each product manufacturer is unique, often requiring on-going

Lean Manufacturing and Continuous Improvement

Building Muscle for Waste Awareness It almost seemed hackneyed: Lean manufacturing and continuous process improvement. The phrase is tossed about with a certain familiarity and forgone conclusion. Yet this intentional, ongoing process of improving services, and procedures to improve flow, customer satisfaction, quality, safety, and profit means nothing without metrics. A systematic process which identifies and eliminates waste so that ongoing, measurable gains are routinely achieved can only be quantified

Supply Chain Visibility and the Bottom-line

Visibility Matters. Rick Morris, a Certified Supply Chain Professional wrote in Supply House Times that while improving fill rates, improved forecast accuracy also lowers inventory levels measured in days of sales; and simultaneously, improved forecast accuracy improves fill rates and lowers inventory. He suggested this translates into increased profitability. When analysts have studied companies that were best-in-class in demand forecasting, they found these companies averaged (according to Advanced Market Research)

Creating Trust Throughout the Supply Chain Using Demand-Driven Methods

How reducing forecasting errors and disruption risks create better supplier relationships. Building trust in the supply chain is essential to driving flow; and when there are forecast errors, there is an inherent mistrust throughout the supply chain. Lack of collaboration is often the cornerstone of conflict, blame, and mistrust between a manufacturer and suppliers. Missed shipments tend to lead to finger-pointing, followed by over-buffering on both sides to guard against