4) Identify and prioritize opportunities for improvement. Once the key issues are identified, opportunities for their improvement can be prioritized based on their potential business impact and the relative ease with which they can be realized. Areas of improvement within your company may include automating the existing manual processes, such as the use of Excel spreadsheets during demand planning; modifying supply chain process to achieve objectives such as deploying a S&OP process to improve alignment between demand and supply or increasing collaboration within the supply chain to increase visibility and velocity; and identifying key supply chain dashboard metrics to improve accountability and enable performance improvement. The graphic below shows an example of a 2X2 matrix approach used to identify high-impact areas. In this scenario, the primary focus for the client was on deploying processes and systems that streamline the supply chain.
Figure 1: 2X2 Matrix Approach
5) Develop a solutions roadmap. This roadmap should estimate what it will take to make the improvements, including the estimated time to fix problems and the overall cost. It should also provide a series of detailed steps and a timeline to implement the recommendations.
Of course, change within the supply chain will not happen overnight. During any assessment process many potential challenges will emerge, including a lack of integration among processes or poor visibility into a company's own systems and the systems shared with manufacturers.
Some companies are overwhelmed by inventory. Others don't have any plan in place to handle order backlog from seasonal or unexpected fluctuations in sales or the means to handle the frequency of new product launches.
Still more are failing to use correct methods to measure many key supply chain functions. The good news is that through a thorough assessment, all of these problems can be identified, prioritized and then addressed over time.
Companies that have conducted a supply chain opportunity assessment and adhered to a roadmap of supply chain changes report many short- and long-term benefits, including reduced inventory, increased velocity, higher on-time delivery, lower supply chain management costs, reduced transportation costs, a lower total cost of ownership and higher sales growth.
Best of all, they are squeezing the most out of their supply chains. And they no longer worry about not achieving peak performance.
About the Authors: Jessie Chimni is vice president of Services and Ashok Santhanam is the CEO of Bristlecone, a supply chain consulting firm (www.bcone.com). Bristlecone brings expertise across the entire spectrum of supply chain, including demand planning, supply planning, network collaboration, sourcing and analytics. In addition Bristlecone provides supply chain-focused KPO services.