$5 Million in Supply Chain Savings Average When Employing Quality Initiatives - Study

No monumental breakthroughs, but incremental improvements add up for quality projects, Best Practices reports

No monumental breakthroughs, but incremental improvements add up for quality projects, Best Practices reports

Chapel Hill, NC  April 19, 2005  Quality projects may not achieve the kind of breakthrough results that can be attributed to re-engineering initiatives, but by focusing on incremental improvement, quality projects can achieve significant bottom line savings for companies, according to a new research study by benchmarking consultancy Best Practices, LLC.

Companies' savings from their largest-impact quality project for the supply chain have ranged from $10,000 to $50 million, with an average savings of $5 million, according to "The Supply Chain & the Impact of Quality Initiatives" report.

The study offers insight into what productivity approaches companies use to improve the supply chain, the cycle, staffing levels and results of the supply chain improvement projects and companies' top lessons learned leading these initiatives.

Key findings include:

  • 40 percent of sampled companies saved at least one hundred times the amount they invested in their quality efforts.

  • Most companies achieve the biggest impact when focusing their quality efforts for the supply chain on demand/supply management and planning; production planning and scheduling; capacity planning and optimization; actual production; and inventory and warehouse management.

  • Benchmarked organizations agree that practices of peer company leaders and other industry leaders are critical to identifying the supply chain critical improvement opportunities.

  • One company was able to reduce complex supply/demand matches from 4-5 days to one minute.
Best Practices said that companies can use the findings from this study to assess how quality initiatives for their supply chains measure up against others', comparing economic returns gained and lessons learned through the implementation and management.

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