Paving the Way for Continual Performance Improvement

Supply chain visibility solutions allow for informed decision making through the visibility of information across the total supply chain


Visibility solutions allow the presentation of higher-level metrics with the ability to drill into the supporting detail, often through multiple layers, to get to the detail that drives action. Robust visibility solutions build metrics from the bottom up, using the most granular level of detail available to build a solid foundation as a basis for all higher-level metrics. This solid foundation gives credibility to the higher-level metrics since all numbers can be justified through the analysis of lower level data.

For the majority of supply chains, corporate-level metrics and performance numbers are often comprised of results from different systems. The ability to drill into the detail information originating from disparate systems is important in understanding all of the factors that contributed to performance measurements. Cross-functional supply chain visibility solutions expand the potential for improvement by exposing weaknesses in specific areas of the supply chain, often at collaboration points. In the measurement of the perfect order fulfillment rate, information from different segments in the supply chain such as manufacturing, distribution, transportation and even the end-user experience is aggregated and complied into an overall performance measurement. The information needed to understand how each area of the supply chain affected the performance measurement should be accessible to analyze the cause-and-effect relationships behind the metrics.

An example is illustrated below by showing an enterprise-level view of performance measurements for perfect order fulfillment:

Figure 1 — Perfect Order Fulfillment Rate Analysis Across Sectors

Accessing supporting information for "Distribution" displays all distribution centers and the performance numbers comprising the high level performance percentage. Further analysis on the lower performing areas can lead to the identification of problem areas as demonstrated in Figure 2.

Figure 2 — Distribution Center Analysis

Analysis of the metrics on a lower performing distribution center, as shown in Figure 2, provides information that on-time delivery performance is lower than average, and could be leading to a lower percentage for complete order fulfillment. Further analysis into supplier on-time performance could identify specific suppliers that are not regularly complying with corporate on-time delivery performance requirements. By taking action with specific suppliers, on-time delivery performance could be improved also leading to improvement further down the supply chain process.

A supply chain executive equipped with this information would be able to isolate areas within the supply chain that are producing the greatest impact to the overall performance. In addition, goals would likely be established for performance improvements for areas within the supply chain that are causing the largest impact. Within a specific cross-functional area of the supply chain, the ability to view the lower-level detail can aid in understanding and prioritizing the specific actions needed for improvement.

When quarterly or annual performance targets are published, supply chain visibility solutions can be used to provide a solid plan in order to achieve performance improvements. If a supply chain executive sets a performance improvement for perfect order fulfillment to increase from 98 percent to 99 percent for the year, strategic and tactical planning can start immediately using a visibility tool to analyze areas for improvement. In addition, areas that are the highest performers can be recognized to determine if specific processes are in place that are leading to increased performance measurements. Oftentimes, sectors of the supply chain that perform well in one area should be explored so that beneficial processes can be propagated throughout the supply chain. Once specific tasks are identified, acting upon the information will provide improvement, and the visibility tool can be used to close the loop by monitoring the execution of the changes.

Using supply chain visibility to provide trending and forecasting for upcoming conditions promotes a proactive approach in preventing possible demand-related issues. Continual performance improvements could be reached by lowering the probability that bottlenecks within the supply chain will occur based on historical trends and forecasting. Many supply chains experience seasonal volume peaks that can be anticipated more accurately with the availability of historical information. Visibility into future demand can refine performance improvements even further by preventing situations that lead to inefficiencies.

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