A recent report was released by Kate Vitasek and J. Paul Dittman at the University of Tennessee about ten “game changers” companies need to consider as they begin executing on their post-recession plan (full report here, registration required).
One quote really struck me was by Dittman who is a former supply chain executive at Whirlpool: “Firms who continue business as usual, rather than fundamentally altering or at least updating their supply chain strategy are truly playing dice with their future.”
Over the past several months we have seen a broad focus on cost reduction and companies “getting lean.” I have seen several cases where deploying technology could further assist in reducing costs, but because of the initial investment that was required the projects were put on hold. I think the above report is a good call to action for supply chain executives to take a step back and start to think beyond the micro-cost management of today and what they will really need to succeed in tomorrow’s environment. In some cases your company might already find themselves falling behind your competitive set. There are other companies that have already been investing during the downturn because they knew their peer group could not so that as soon as the global economy turns they could capitalize.
One of the game changes Vitasek and Dittman focus on is “The Mandate for Measurement.” They stress the need for well thought-out supply chain metrics that tie to corporate strategy as well as give a good view into the health and performance of your supply chain operations. Just as we did with our HighJump Performance Advantage product; they recommend incorporating industry benchmarks into your key performance indicators (KPIs) so you can understand your relative performance. Key metrics to consider are: on-time shipments, order picking accuracy, order fill rates, and back orders percent (of total orders).
Hopefully your company has already looked at how the supply chain can and will be required to change the game for your business.
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