Optimizing Supply Chain for Maximum Impact
Our experience has taught us that a holistic approach to supply chain optimization is crucial. We examine the people, processes and systems, balancing the strategic and high-level design with the myriad little issues that have a big impact: training, information flow, safety, tool use, maintenance, housekeeping and more.
A supply chain is optimized around balancing four inputs or choices: service levels, capacity, inventory and cost or ROI.
Optimization looks different depending on the chosen balance. Higher inventory can make higher service levels possible, but is the carrying cost worth the difference between a 95% and 99% service level?
Effective supply chain planning manages the chosen balance inside current capabilities and continues to identify beneficial trade-offs that improve optimization.
To optimize any supply chain, we begin by:
- Defining the organization’s Supply Chain, key processes and all key internal and external partners
- Quantifying the implicit or explicit choices made around service, capacity, inventory and cost
- Identifying specific responsibilities for all operations, third party contractors and suppliers
- Understanding the volume of items and information that is transferred between discreet operations within the supply chain
- Understanding supply chain performance predictability and variability
- Characterizing the product portfolio and inventory profile in terms of cost and frequency of use (ABC)
- Understanding demand profile for different services and/or products at each location
- Understanding how Supply Chain Planning gathers, analyzes and disseminates information
- Modeling potential supply chain inventory based on structure, capability and service levels
- Identifying conflicts, redundancies and gaps in the current supply chain
- Establishing consistent, objective, quantifiable performance measures for each process across the supply chain
- Establishing planning routines at different levels of the organization to support decision making
- Creating the capability through planning, management systems, information flow and accountability to synchronize discreet operations within the supply chain, which will optimize overall supply chain performance
Our supply chain optimization expertise spans dozens of countries and industries. It is powerfully articulated by stories in our related case studies.