Without managing the strategic and operational performance of your supply chains and operations, you will not be able to achieve the strategic objectives of your Supply Chain Strategy and Corporate Strategy.
Supply chain performance, when managed well, ensures the strategic objectives of a firm’s corporate strategy are achieved. It entails measuring and communicating performance, benchmarking performance, establishing performance targets, managing gaps and risk, building capability, nurturing stakeholders, and leading improvements and change.
Leading companies identify the performance requirements of their key customers, major supply chains, shareholders and key stakeholders, and then configure their supply chain network, processes and resources to achieve these requirements.
What does on-time performance mean to your customers and to your customers’ customers? It could mean: no loss of business, no loss of life, great relief, great satisfaction, ability to get home on time, fulfil orders, maintain assets, achieve productivity targets – these are just a few examples. If we only had to configure supply chains to achieve “on-time” performance, that would be super easy; however, the risk of all other performance factors becoming unbalanced would increase significantly. For example, costs would blow out to astronomical proportions if we ensured that 100% of our goods and services were available 100% of the time. An appropriate balance between time, cost and quality performance is required.
All customers expect reliable, responsive and flexible services from suppliers who are also able to manage costs and assets efficiently. The customer service performance needs of business-to-business and business-to-consumer supply chains are not that dissimilar. However, you need to identify the degree by which these requirements differ from customer to customer (or per major supply chain), and then to ensure your supply chain network, processes and resources are configured to operate and achieve this level of required performance.
What type of customer service performance do your customers expect and do their customers expect? For example:
- a hospital relies on reliable medical equipment and devices, hence availability and durability of these assets are paramount
- rail commuters rely on on-time train services and services that do not cancel, to prevent congestion in subways during peak periods
- buyers of commodities are typically price-conscious and also expect a responsive fast service to meet their immediate needs
- manufacturers of new products require quality suppliers who are flexible and able to respond rapidly to reduce time-to-market.
Reviewing supply chain performance answers questions such as:
- How are we measuring, tracking and reporting performance now?
- Did we achieve our strategic performance targets and business goals?
- How should we set performance targets?
- What are the performance gaps? Where did we go wrong? What do we need to do to close the gap?
- What supply chain improvement projects are required?
- How can we make improvements during business-as-usual to avoid having to establish a project?
- How do we get staff, management and suppliers on-board to want to make these improvements?
- How do we manage change and lead staff to improve our supply chains and operations?
Would you like your firm and its supply chains performing at the highest level of supply chain maturity? If so, then it would look something like this:
Supply Chain Performance Goal: Supply chain performance is optimal, competitive and predictive. Best practice metrics, accurate data and innovative technology allow timely results communication. Supply chain performance gaps and risks are proactively managed by expert teams. Supply chain performance objectives are sustainable and substantial value is continuously created.
At Supply Chain Manager® we assist our clients to achieve and sustain superior Supply Chain Performance by providing advice, assistance and support in the following areas: