Supply Chain Professionals...What's Your PAID Value? (Click on image to read full article)

I'm a Supply Chain professional that is highly motivated?in?helping bring the Supply Chain profession to the forefront and demonstrating what value we provide to our organizations. After all, we do a lot more than "just buy things".

Fortunately, I am?lucky in?that I?have worked for organizations that have always valued Supply Chain and would like to assist fellow Supply Chain professionals in showing?their Supply Chain value. As a result, I have created?PAID Value.

PAID Value?is what your?Supply Chain's achieved cost reduction?would be equivalent to in increased sales as a percentage (P), additional sales revenue (A),?increased valuation of the company (I)?as a result of?the impact on the bottom line and your expenditure on goods and services in dollars?(D).

Here is an example of a Supply Chain's?PAID Value?for a Manufacturing Company:

R - Revenue?Value $54,000,000.00.???

B - Profit Margin $?Value $5,400,000.00.??

M -?Profit Margin %?Formula B/R?Value?10%.??

D - Cost?of Goods and Services?in Dollars?Value $27,600,000.00.??

Cost of Goods and Services as a % of Revenue?Formula?D/R?Value 51.1%.????

C - Achieved Cost Reduction?Value $1,863,000.00.??????????

Achieved Cost Reduction?as a Percentage?Formula C/D?Value?6.75%.?

A - Additional Sales Equivalent Revenue?Formula (100 / M) x C?Value $18,630,000.00.??

P - Increased Sales Equivalent as a?Percentage?Formula?(A / R) x 100?Value 34.5%.??????

I - Increased Valuation of the Company?Formula C?x 3?Value $5,589,000.00.

In the above example the?PAID Value?would be:

P - 34.5%?A - $18,630,000.00?I -??$5,589,000.00?D - $27,600,000.00

Remember, PAID Value will never expire and good luck on promoting your Supply Chain value!?

Hopefully, this information will be useful to you and will help raise awareness of the value of Supply Chain professionals.

Thank you for taking the time to read this and?please feel free to?share a current or previous?Supply Chain?PAID Value?in the comments section below. Also, I would love to hear?of other ways that you show value from your Supply Chain!?