4 Steps to Supply Chain Management Success

Pat McGrath November 26, 2014

Successful Supply Chain ManagementOverview

Taking on a Supply Chain Management project can seem like you're trying to map the stars in the universe. Take comfort in the fact that others have traveled this way before you and there is much to learn from their experiences. Start by understanding what you are trying to accomplish.

Objectives

If you are looking for operational improvement, Supply Chain Management offers many ways to realize savings in time, costs and improved customer satisfaction. First, let’s break down the in-bound and out-bound components of your Supply Chain.

On the inbound side you have:Supply Chain Management

  • Suppliers Procurement
  • Manufacturing
  • Product
  • Inventory

On the out-bound side you have:

  • Distribution
  • Logistics
  • Customers

Having visibility, event alerts and information driven decision abilities are the power provided by an automated Supply Chain. As you would expect, the benefits are many. To name a few see the list below.

Benefits

Inbound Scenarios

  • Reduce stock outs by tracking critical inbound orders
  • Reduce lead time variability by tracking orders against predefined milestones and alerting the right person to take corrective action when orders are delayed between milestones
  • Reduce expediting costs by enabling buyers to respond immediately to supply chain disruptions so that an order doesn't need to be expedited
  • Reduce manual order tracking costs by receiving automated status updates

Outbound Scenarios

  • Improve customer satisfaction through better order processing and delay notification
  • Improve deliveries by monitoring delivery agent performance and addressing reoccurring issues
  • Reduce time and costs associated with complaints
  • Improve delivery performance and reliability

The in-bound/out-bound benefits offer savings in cost and time, plus, opportunities to improve customer satisfaction. Now, we can look at the supporting management opportunities by area.

Main functions of Supply Chain Management

The system you select should consider the management of the following areas :

  • Inventory
  • Distribution
  • Channels
  • Payments
  • Financials
  • Suppliers
  • Transportation
  • Customer Service

You and your people do all of this, today. That being said, you will need to understand how these new processes flow, including the inputs and outputs, reporting and the actionable criteria to be defined in the new system’s configuration.

Organization and Cultural Considerations

With a new Supply Chain Management system, comes change. Organizational change management should be included as part of the planning, implementation, testing and deployment of your new system. The way you’ve been doing business is a secure place for your people. The new system upsets that security based on their knowledge and experience with the old and all of the unknowns with the new. Consider the following current way things are done and the future changes to processes, procedures, controls and structures, for the following areas:

  • SCM SuccessWork Flows
  • Organizational Structure
  • Product Build
  • Information Flows
  • Planning and Controls
  • Management
  • Leadership and Reporting
  • Risk/Reward Considerations
  • Culture and Attitudes

Communicate the benefits to be realized, the problems to be addressed and finally, publish a schedule of education for users of the new system. Also, consider user Involvement in the testing processes to help them see how the new system is producing similar, but improved results.

4 Keys to SCM Success

So, let’s break this down into a manageable set of high-level events.

  1. Start with the Processes – understand your current state; process owners; inputs and outputs to each process; existing systems and technology; suppliers roles; buyers role; authority and sign-off processes; escalation procedures
  2. Select Technology based on ROI – establish the benefits to be realized based on an automated supply chain; define new s/w, h/w and services costs needed to accomplish the tasks ; consider “new/expanded” roles of suppliers and information flows/access
    • Many vendors offer products for Supply Chain Management. B-WI works with Infor who has a Value Engineering offering to assess the opportunities and the financial benefits of automating to better manage your supply chain. Check us out at www.b-wi.com and at www.infor.com
  3. Train and Prepare you Organization – provide systems and functional education for users/management/executive/external users; provide new technology training – handheld devices,reports; involve uses of criteria established for event management and alerts
  4. Finally, work with experienced professionals to help define and lead the project. The project should be phased based. Give each phase enough time to realize success and highlight those results. Build on success as you go. As you establish faith in the new system this will further the success of the next phases of the system capabilities being deployed.

Summary

This should help you get on your way. If you like further help or directions, please reach out to me or our team of consultants here at Barry-Wehmiller, International. Contact me at Pat.McGrath@B-WI.com . Wishing you a successful project! ;-).

Links of Interest

Educational Programs http://www.businessweek.com/articles/2013-06-28/supply-chain-management-the-new-b-school-must-have

Video https://www.youtube.com/watch?v=gBRrG0-SA1I

References and Acknowledgements

Special thanks to Matt Gidley, IT Director and resident SCM expert. Matt manages the PCMC systems and has presented at many events, sharing his implementation experiences of the Supply Chain Management System. PCMC is a Capital Equipment Manufacturer Specializing in:

  • Tissue Converting/Packaging (Toilet Tissue / Paper Toweling)
  • Flexographic Printing
  • Non Woven Converting (Wet Wipes)
  • Roll Engraving
  • Envelope Converting
  • www.pcmc.com

Pat McGrathAbout the Author: Patricia McGrath is pleased to represent Barry-Wehmiller International, as Director of Strategic Initiatives. B-WI provides consulting and services for manufacturing, engineering, ERP solutions, and specialized development and support services. Pat’s career includes positions with such prestigious companies as IBM and KPMG. While there she focused on strategy, ERP business partners and business consulting, plus having her own company working with others to develop both strategic initiatives and tactical plans.

Topics Enterprise Solutions