Supply Chain Management – The Total Performance Picture

Supply Chain Management metrics and monitoring systems track and provide valuable information indicating packaging line performance as well as highlight hot spots within the Supply Chain to address.  So, what do you do when all the problems highlighted by your Supply Chain Management system have been addressed but your production line's output is still not up to the level expected by the company’s management?

With deeper probing, began to find that some plants that scored well on standard Supply Chain metrics were languishing. Their line efficiency metrics had plateaued and well below company targets. They were languishing and unhappy with the performance and service provided by their packaging suppliers. The standard Supply Chain monitoring system was not capable to report the rest of the picture, the smaller but high frequency events “under the radar” causing havoc on the line. For example: those 1 or 2 random defective parts out of the 400 parts found in every pallet load that each caused the line to go down plus someone to remove the defective part jammed in one of the line's packaging machines.

My five findings:

1.     Insure that the package design and specification tolerances are compatible with packaging equipment. On occasion, engineers will concentrate on product protection only and fail to take into account design specifics required for equipment compatibility.

2.     Don’t take advantage of one’s suppliers. E.g. using the next day “emergency” order option more like a norm than emergency.

3.      Plants and suppliers must be able to speak together, using the same language. Each supplier/industry has its own vernacular to describe how things look and work when performing well and when defective.

4.      Plants must effectively, timely and freely communicate with their supplier, especially when having issues.

5.      Develop a mindset to solve the problem vs. striving to determine who is at fault.    

By embracing these five areas, plants can reduce and eliminate the “under the radar” small $, high frequency hash that can suck the life out of a line's efficiency performance metrics. Again, these “under the radar” events do have metrics that can be measured, but one needs to be a little creative to set those measures up. The overall Supply Chain Management system must be capable to shed data about the whole iceberg, both above and below the water line, to truly provide the accurate pictures of your plants’ Supply Chain and line performance to hit those optimum numbers which now look to be unattainable, Utopian levels.