Monday, August 4, 2008

Supply Chain Management: A Key to Success

Aberdeen Research Group’s survey of over 800 supply chain executives found just how tough the business pressures have become in their supply chains and highlighted the critical role that supply chain management can play in the overall success of the company. They found that Best-in-Class companies had:

  • Finished goods inventory turns of 28 turns
  • Total logistics costs as a percentage of sales of 5%
  • Perfect order percentage (complete and on-time) of 96%

In order to achieve these results, they found that:

  • Best-in-Class companies are 1.7 times more likely to have end to end supply chain visibility.
  • Best-in-Class companies are 1.5 times more likely to have implemented cross functional metrics across the entire enterprise.
  • Best-in-Class companies are 2 times more likely to have a single executive with overall supply chain responsibility.

In order to improve and achieve Best-in-Class status, companies need to:

  • Invest in data quality as part of the supply chain initiatives.
  • Institute a formal Sales and Operations Planning roadmap to execute reporting and metrics.
  • Improve supply chain responsiveness in order to manage and react to market events.

Are You Best-in-Class?