Supply Chain Management Best Practices
This report gives supply chain managers data and tools to enable their companies to maximize productivity and enhance their ability to compete. The report was generated from a survey of 27 selected companies recognized for supply chain leadership as well as from interviews with executives at five of those leading companies and online research on more than 100 additional organizations.
Business Operations > Supply Chain Management d
Industries Profiled:
Automobile; Transportation; Manufacturing; Computer Hardware; Computers; Consumer Products; Shipping; High Tech; Office Equipment; Electronics; Internet; Chemical; Telecommunications; Professional Services; Health Care; Energy; Retail
Companies Profiled:
DaimlerChrysler; Dana Corporation; Dell Computer; Eastman Kodak; Federal Express; FedEx; Ford Motor Company; Hewlett-Packard; HON Company; Intel; Johnson Diversey; Lexmark; Motorola; Siemens; Wal-Mart
Study Snapshot
Supply chain performance is a key factor in a company's competitiveness, and leading edge organizations are meeting the performance challenge through adopting Internet tools, build-to-order / mass customization programs, vendor managed inventory and other productivity initiatives. Understanding the very latest systems, practices and world-class performance is crucial to companies seeking to improve their own supply chain management effectiveness.
This Best Practices LLC study looks across the entire supply chain to deliver more than 20 detailed performance metrics and over 40 best practices in on-time delivery, cycle time reduction, cost control, inventory carrying costs, fill rates, return rates, lead time, cash-to-cash conversion, days sales outstanding, days payables outstanding, outsourcing, Internet tools, and more.
Supply chain management effectiveness is a critical component of a manufacturer's ability to remain competitive. This Best Practices LLC report will assist companies in assessing their supply chain functions against those of industry leaders, enabling them to identify and close performance gaps and eclipse the competition.
Specifically, this study examines the following components of industry-leading supply chain management:
- Performance to standard measures such as on-time delivery, fill rate, lead times, etc.
- Supply chain costs and cost saving initiatives
- And demand / supply chain initiatives that enhance the working relationship between vendors and customers, including BTO (build-to-order – mass customization), CPFR (collaborative planning forecasting and replenishment), VMI (vendor managed inventory), ATP (available to promise), cross-docking, and outsourcing to third party logistics providers.
By studying other organizations’ best practices in supply chain management, your company can better understand how to measure performance, close gaps and select productivity initiatives to maximize effectiveness and improve the corporate bottom line.
Metrics Included in the Study
Performance metrics enable executives to perform gap analyses and identify areas needing improvement. Metrics are an important complement to the qualitative best practices included in this study report. Best Practices LLC analysts collected and analyzed the following key metrics for supply chain management at each of 27 companies benchmarked through surveys and interviews for this study:
- Delivery Performance Metrics including on-time delivery, performance to commit, fill rate, and return rates
- Cycle Time Metrics including promised lead time, actual lead time, and supply chain cycle time
- Inventory and Cash Management Metrics including inventory days of supply, days sales outstanding, days payables outstanding, and cash-to-cash conversion
- Supply Chain Cost Metrics including overall supply chain costs, order management costs, inventory carrying costs, supply chain finance and planning costs, supply chain IT costs, procurement department staffing and savings
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Key Findings
The top three findings from this benchmark study are:
Several companies have perceived 100% performance at a number of key measures, including on-time delivery, and fill rate. Performance to these measures, however, sometimes comes at a penalty, since some measures can be contradictory, if not mutually exclusive. For example, a high fill rate can be achieved by having a poor (i.e., high) inventory days on-hand measure. Several companies in the study, however, have optimized their systems to achieve excellent performance across the board.
Recent supply chain management trends include increasingly powerful private trading networks, increased transparency in measuring and monitoring the value chain performance, and outsourcing of non-core activities. The report examines the use of reverse auctions for procuring commodities as well as trends in increased transparency of the chain. The use of Third Party Logistics and Fourth Party Logistics companies is also investigated.
Cost management techniques, along with performance improvement initiatives, have revolutionized the entire supply chain management process. The study details more than 45 winning practices identified through partner interviews and background research on the latest keys to supply chain success.
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Related Research:
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