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Supply Chain Overview

Supply Chain Overview. Supply Chain Metrics California Computer manufacturer Cost per Placement Indiana Component plant of auto manufacturer Inventory Inventory Turns Annual Sales at Inventory Cost/Value of Inventory. Customer Service. Line Item Fill Rate Order Fill Rate

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Supply Chain Overview

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  1. Supply Chain Overview • Supply Chain Metrics • California Computer manufacturer • Cost per Placement • Indiana Component plant of auto manufacturer • Inventory • Inventory Turns • Annual Sales at Inventory Cost/Value of Inventory

  2. Customer Service • Line Item Fill Rate • Order Fill Rate • On-Time delivery • Order cycle time • Invoice Accuracy • ….

  3. Information to Customers • Provide accurate information of delivery • Get it there on time • Provide up-to-date information in exceptions • Preferably in advance

  4. Information Internally • Accurate and timely information easy to retrieve • Short planning cycles • Short forecast accurate forecasts

  5. Manage Variability • Identify it • Eliminate it • Hedge against it

  6. Don’t Cover Up • Don’t hide behind unnecessary inventory • Why is it there? • Is it necessary? • Is it the right amount?

  7. Understand the Cost of Inventory • Cost of Capital • Return on Assets • Obsolescence • Damage and Shrinkage • Capital investments • Location

  8. Product Design • Postpone differentiation

  9. Communicate • Know your customers’ customers • Inform your suppliers’ suppliers

  10. Coordinate • Expediting costs money • Avoid “hurry-up and wait”

  11. Minimize Total Cost • Freight • Inventory • Order processing • Packaging • Handling • ….

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