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Last updated on 2024年6月2日

How do you assess the performance of your supply chain?

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Assessing the performance of your supply chain is critical to the success of your business operations. It's about understanding how well your supply chain is functioning and identifying areas for improvement. A robust supply chain ensures that products are delivered on time, costs are controlled, and customer satisfaction is high. To do this effectively, you need to examine various aspects of your supply chain, from supplier performance to inventory management. By regularly reviewing these areas, you can make informed decisions that enhance efficiency, reduce waste, and maintain a competitive edge in the market.

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1 Key Metrics

To gauge the health of your supply chain, it's essential to track key performance indicators (KPIs). These metrics can include delivery times, order accuracy, and inventory turnover rates. By analyzing these numbers, you can pinpoint bottlenecks or inefficiencies. For example, consistently late deliveries might indicate a need to re-evaluate your transportation providers or shipping routes. High accuracy rates in fulfilling orders, on the other hand, suggest that your picking and packing processes are effective.

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2 Supplier Evaluation

Evaluating your suppliers is a vital part of supply chain assessment. Look at their on-time delivery rates, quality of goods provided, and responsiveness to issues. Strong relationships with reliable suppliers can lead to better terms and improved supply chain performance. If a supplier frequently misses delivery windows or provides subpar goods, it may be time to seek alternatives or renegotiate the terms of your agreement.

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Madan Iyengar Supply Chain Professional

Supply Chain Professional, Varun Beverages, Chartered Accountant
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Consistency of performance as well as clarity of communication are both vital. A supplier must be willing to deliver bad news on time in full and not just material! For them to do so, it is incumbent on you to empower them to fearlessly share the bad news, knowing they will not be penalized for merely being proactive. Early visibility of issues up ahead would allow you to improve your planning, to convey news of such issues upwards to decision makers and enable adjustments in time.

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3 Inventory Analysis

Inventory analysis involves monitoring stock levels to ensure you have the right amount of product on hand. Too much inventory ties up capital and increases storage costs, while too little can lead to stockouts and lost sales. Regularly reviewing inventory metrics, such as turnover rates and holding costs, helps maintain the balance between having enough stock to meet demand and minimizing excess inventory.

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Madan Iyengar Supply Chain Professional

Supply Chain Professional, Varun Beverages, Chartered Accountant
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In an ideal supply chain, raw material would be continuously in motion, never reaching an idle state. While we don't live in an ideal world, we can maintain material at no more than safety stock levels through robust forecasting and continuous monitoring of the movement of material.

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4 Process Mapping

Process mapping involves creating a visual representation of your supply chain processes to identify inefficiencies and areas for improvement. This can highlight unnecessary steps or delays in your supply chain. By streamlining these processes, you can reduce lead times and increase the reliability of your supply chain, ultimately improving customer satisfaction.

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5 Technology Utilization

Leveraging technology can significantly improve supply chain performance. Tools like Enterprise Resource Planning (ERP) systems and Transportation Management Systems (TMS) provide real-time data and analytics that can help manage inventory, track shipments, and forecast demand more accurately. Assessing your technology stack and ensuring it meets your supply chain needs is crucial for maintaining a competitive edge.

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6 Continuous Improvement

The supply chain is dynamic, and continuous improvement is key to staying ahead. Regularly reassessing your supply chain using the methods above allows for ongoing refinement. Embrace a culture of innovation where feedback is welcomed and changes are implemented swiftly. This proactive approach ensures your supply chain remains efficient, cost-effective, and aligned with your business goals.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Madan Iyengar Supply Chain Professional

Supply Chain Professional, Varun Beverages, Chartered Accountant
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Achieving a balance between responsiveness and efficiency is paramount. In a responsive and resilient supply chain, business would never face lack of supply to meet the demand. In an efficient supply chain, no additional cost would be incurred to meet the supply. The balance on these two can be achieved by separating bulk materials whose consumption may be tied to the overall capacity of the plant and thus easier to predict from light materials key to the customization of a product. For these materials, postponement and flexibility would be key.

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How do you assess the performance of your supply chain?

1

2

3

4

5

6

7

1 Key Metrics

2 Supplier Evaluation

3 Inventory Analysis

4 Process Mapping

5 Technology Utilization

6 Continuous Improvement

7 Here’s what else to consider

Business Operations

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How do you assess the performance of your supply chain?

1

2

3

4

5

6

7

1 Key Metrics

2 Supplier Evaluation

3 Inventory Analysis

4 Process Mapping

5 Technology Utilization

6 Continuous Improvement

7 Here’s what else to consider

Business Operations

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