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Supply Chain “Proverbs-to-ponder”

IDENTIFYING CAUSES FOR UNSUSTAINABLE BEHAVIOR

Efforts for sustaining supply chain benefits have been under fire. Business requires supply chain programs for implementing their strategies. Variability, especially uncertainties in operations dim the chances for even the best solutions to return results in a consistent manner. Sustainability, is taking center-stage for CXOs and I see them scramble for ideas that have demonstrated results.

I have witnessed such variations in supply chains that present themselves as both daunting and a worthwhile pursuit. Here are 3 approaches that can help with sustaining your supply chain initiatives, whether it is for planning or for execution. I call them the “3 Proverbs to Sustainability”. (I know most of you think of GREEN when you hear of sustainability)

#1: In calamity, 50% is danger and 50% is opportunity
Considering supply chain uncertainties as keys to unlocking value is the first step. Each supply chain process has a constant and a variable that drives its efficiency. Understanding the trade-offs between sure and unsure aspects of a process will ensure that you can determine your supply chain’s KPI (Key Performance Indicators) accurately. As an example, On-time delivery as a KPI can be overly different for measuring the same process if the calculations are based receiving an Order- Date of Order, Date of Processing/Releasing Order or Date of Shipment. It is critical that Retailers and their Suppliers get these definitions correct prior to setting their KPI baselines.

#2: Everyone knows how a ship can be saved; after it has sunk
Most supply chain intelligence (a.k.a Performance Reports) delivers for metrics “after-the-fact”. Solutions need to adapt to early warnings (preemptive analytics) as much as they report performance measures. Supply chain visibility can offer businesses to identify problems when they are ready to appear. My observation of supply chains shows that there are tremendous opportunities to unlock value if we design supply chain visibility solutions horizontally. If a Retailer’s buyer creates a Purchase Order for a Supplier abroad; and lack of visibility into a vessel booking process “x” days prior to or before the receipt of goods by Supplier informed via their ASN (Advanced Ship Notices) can become a prospect for failure. Supply chains must anticipate risks early on. See Infosys approach by visiting www.nextgenerationsupplychain.com

#3: To change and to improve are two different things
Solutions promise change. Improvement is a whole different point. In my viewpoint, the extent to which a Solution or Method must allow for betterment to current business metrics need to be part of designing and implementing Technology for business process improvements. Continuous improvements, though very challenging, must be at the helm of supply chain innovation.

You’ll all agree that supply chain leaders must reevaluate their Solution capabilities. Including practical metrics to consider the impact of uncertainties, improving visibility alongside proactive alerts and adapting to continuous improvement practices through innovation in design can convert risks into benefits that are sustainable.

If we take a second look, it will cost us nothing to practice these proverbs.

Comments

I tend to agree with you Shan on the point that the Solution Leaders must keep on re-evaluating their supply chain solution capabilities and need to keep on re-defining the metrics too that they want to measure and improve as part of their SCM optimization drive.

Nice articulation of thoughts by you.
Thanks.

Puneesh, I had an experience relating to re-defining metrics. A Sporting Goods Manaufacturer implementing WMS had conflicting metrics within inbound flow, warehouse operations and customer service KPIs. We had to organize a workshop early on to define and benchmark KPIs across the Distribution Network and solicit agreements prior to Requirements gathering.

Thank you for reading and providing your feedback.

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