Fall 2007 issue of Horizons

INDUSTRy u

MANUFACTURING AND DISTRIBUTION

Supply Chain Measurement Managing your supply chain is key to any successful manufacturing or distribution business. Measuring your supply chain through metrics can make a big difference in performance. But simply having supply chainmeasures in place is only part of the answer. Having the right measures in place and being able to act upon them is the key to successful supply chain measurement. Many companies search for best practices for supply chain management by benchmarking themselves against other companies that have been successful and fail to understand why those supply chain measurements don’t produce the same results at their companies. Unfortunately, what they don’t realize is that those supply metrics do not align with their company’s strategies or business operations. A well thought out supply chain measurement program should: 1. Support, enhance and be an integral part of a company’s competitive business strategy. 2. Leverage a distinctive supply chain operating model to sustain competitiveness. 3. Execute well against a balanced set of operational performance objectives. 4. Focus on a limited number of business practices that reinforce each other to support the operating model and best achieve operational objectives. Companies must devise tailored practices that meet their corporate strategies and objectives. Some challenges to supply chain measurements include: Defining the metrics to measure Many companies have too many metrics, resulting in difficulty gathering the data. Once they do manage to gather the data, it is difficult to interpret the results. Other companies hold endless debates over the pros and cons of each metric. Although some debate is good, there is a point at which debate becomes a form of resistance

35 u winter 2007 issue