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Customer related and process related Supply Chain indicators such as order fill rates, customer service level, order to customer, purchase to pay, response time and others are used first of all internally by the Supply Chain Manager to evaluate his Supply Chain with regards to effectiveness and efficiency.

 

Supply Chain Management (SCM) is a major contributor in fulfilling corporate objectives

 

SCM can be a powerful tool to achieve corporate objectives. Broad ranges of different supply chain levers support specific corporate objectives. Levers for working capital improvements are inventory reductions, cycle time reductions and improved asset utilization. Sales growth can be achieved through product variety without additional cost, capacity and service improvements as well as responsive cycle times for customers. Total cost structure improvements result from improved capabilities, flexible and reliable manufacturing and integrated short cycle times. In addition, e-Chain solutions such as solutions for e-Planning, e-Fulfilment, e-Procurement and e-Sales are gaining recognition as having huge potential to support Supply Chain Management to achieve strategic objectives, but at present, are not yet fully exploited.

 

Supply Chain Management is expanding in span and scope

 

Today most companies focus on their internal supply chain and on the integration of their first tier supplier/customers. In the future, companies will significantly expand the supply chain span towards the supplier’s supplier and towards the customer’s customer with a slight shift to more customer integration. One major driver to implement expansion of the SCM’s span is the increase of e-Chain investments, which enable collaboration with upstream and downstream partners. The SCM scope - the cross-business integration of information, product, activity and cash flow – will be a major contributor in the future to achieve SCM objectives, such as improved customer service, reduced cost, support for growth and higher cash flow.

 

Financial supply chain performance indicators are a prerequisite in communicating supply chain management results at the top management level

 

Financial supply chain indicators such as supply chain costs, return on supply chain assets, return on inventory investment and others are the essential instruments for each supply chain manager in reporting SCM performance to other functions and to top management.

 

Bridging the gap between supply chain financial levers and the company’s financial value drivers is the key to communicating Supply Chain Management results to ‘C’ level management.

 

Non-financial supply chain performance indicators such as order fill rates, customer service level, order to customer cycle time, purchase to pay cycle time, response time and others are primarily used internally to evaluate supply chain effectiveness and efficiency.

 

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